ACCREDITED HOME LENDERS, INC.,
SPONSOR AND MASTER SERVICER
Asset-Backed Certificates, Asset-Backed Notes
UNDERWRITING AGREEMENT
September 23, 1996
▇▇▇▇▇▇ BROTHERS INC.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Accredited Home Lenders, Inc. (the "Company") is a California
corporation with its principal place of business in San Diego, California. The
Company has registered with the Commission (as defined below) $500 million of
Asset-Backed Certificates and Asset-Backed Notes (collectively, the
"Certificates"). The Certificates may be issued in one or more series (each, a
"Series"), and, within each Series, in one or more classes (each, a "Class") on
terms determined at the time of sale. Each Series will be issued under a
separate Pooling and Servicing Agreement (each, a "Pooling and Servicing
Agreement") among the Company, as sponsor and master servicer, and a trustee to
be identified in the prospectus supplement for each such Series (the "Trustee").
The Certificates of each Series will evidence specified interests in a separate
pool of Mortgage Loans (the "Pool") and certain other property held in trust
with respect to such Series (each, a "Trust Fund"). A form of Pooling and
Servicing Agreement has been filed as an exhibit to the Registration Statement
(as defined below).
The Certificates are more fully described in a Registration
Statement which the Company has furnished to ▇▇▇▇▇▇ Brothers Inc. (the
"Underwriter"). Capitalized terms used but not defined herein have the meanings
given to them in the Pooling and Servicing Agreement.
Each offering of Certificates pursuant to this Underwriting
Agreement (the "Agreement") will be made through the Underwriter. Whenever the
Company decides to make an offering of Certificates under this Agreement, it
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Certificates to, and the purchase and offering
thereof by the Underwriter. The Terms Agreement relating to each offering of
Certificates shall specify, among other things, the principal amount or amounts
of Certificates to be issued, the price or prices at which the Certificates are
to be purchased by the Underwriter from the Company and the initial public
offering price or prices or the method by which the price or prices at which
such Certificates are to be sold will be determined. A Terms Agreement, which
shall be substantially in the form of Exhibit A hereto, may take the form of an
exchange of any standard form of written telecommunication between the
Underwriter and the Company. Each such offering of Certificates will be governed
by this Agreement, as supplemented by the applicable Terms Agreement, and this
Agreement and such Terms Agreement shall inure to the benefit of and be binding
upon the Underwriter.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 33-07219) (the
"Registration Statement"), 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 "1933 Act"), and has filed, and proposes to file, such
amendments thereto as may have been required to the date hereof pursuant to the
1933 Act and the rules of the Commission thereunder (the "Regulations"). Such
Registration Statement, as amended at the time when it becomes effective under
the 1933 Act, and the prospectus relating to the sale of Certificates by the
Company constituting a part thereof, as from time to time each is amended or
supplemented pursuant to the 1933 Act or otherwise, are referred to herein as
the "Registration Statement" and the "Prospectus" respectively; provided,
however, that a supplement to the Prospectus contemplated by Section 3(a) hereof
(a "Prospectus Supplement") shall be deemed to have supplemented the Prospectus
only with respect to the offering or offerings of Certificates to which it
relates.
SECTION 1. Representations and Warranties. The Company represents
and warrants to the Underwriter as of the date hereof and as of the date of each
Terms Agreement (in each case, the "Representation Date"), as follows:
(a) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective did, and as of the applicable
Representation Date will, comply in all material respects with the
requirements of the 1933 Act and the Regulations. The Registration
Statement, at the time it became effective did not, and as of the
applicable Representation Date will not, contain 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, in the light of the
circumstances under which they were made, not
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misleading. The Prospectus, as amended or supplemented at the time the
Registration Statement became effective did not, and as amended or
supplemented as of the applicable Representation Date will not, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in, or omissions from, the Registration Statement
or Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Underwriter expressly for use
in the Registration Statement or Prospectus. The conditions to the use by
the Company of a registration statement on Form S-3 under the 1933 Act, as
set forth in the General Instructions to Form S-3, have been satisfied
with respect to the Registration Statement, as applicable, and the
Prospectus. There are no contracts or documents of the Company which are
required to be filed as exhibits to the Registration Statement pursuant to
the 1933 Act or the Regulations which have not been so filed.
(b) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
California 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 this Agreement, the
applicable Pooling and Servicing Agreement and the applicable Terms
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
the ownership or lease of its properties or the conduct of its business
requires such qualification.
(c) The Company is not in violation of its certificate of
incorporation or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its properties may be
bound, which default might result in any material adverse change in the
financial condition, earnings, affairs or business of the Company or which
might materially and adversely affect the properties or assets thereof.
(d) The execution and delivery by the Company of this Agreement, the
applicable Terms Agreement and the applicable Pooling and Servicing
Agreement are within the corporate power of the Company and have been duly
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authorized by all necessary corporate action on the part of the Company;
and neither the issuance and sale of the Certificates to the Underwriter,
nor the execution and delivery by the Company of this Agreement and the
applicable Pooling and Servicing Agreement, nor the consummation by the
Company of the transactions therein contemplated, nor compliance by the
Company with the provisions hereof or thereof, will materially conflict
with or result in a material breach of, or constitute a material default
under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Company or its properties or the
certificate of incorporation or by-laws of the Company, or any of the
provisions of any indenture, mortgage, contract or other instrument to
which the Company is a party or by which it is bound or result in the
creation or imposition of any lien, charge or encumbrance upon any of its
property pursuant to the terms of any such indenture, mortgage, contract
or other instrument.
(e) This Agreement has been, and each applicable Terms Agreement
when executed and delivered as contemplated hereby and thereby will have
been, duly authorized, executed and delivered by the Company, and each
constitutes, or will constitute when so executed and delivered, a legal,
valid and binding instrument enforceable against the Company in accordance
with its terms, subject (i) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally, (ii) as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law) and (iii) as to enforceability with respect to rights of indemnity
thereunder, to limitations of public policy under applicable securities
laws.
(f) The applicable Pooling and Servicing Agreement when executed and
delivered as contemplated hereby and thereby will have been duly
authorized, executed and delivered by the Company, and will constitute
when so executed and delivered, a legal, valid and binding instrument
enforceable against the Company in accordance with its terms, subject (i)
to applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and (ii) as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(g) As of the applicable Closing Time (as defined below), the
applicable Certificates will have been duly and validly authorized by the
Company, and, when executed
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and authenticated as specified in the Pooling and Servicing Agreement,
will be validly issued and outstanding and will be entitled to the
benefits of the applicable Pooling and Servicing Agreement.
(h) No filing or registration with, notice to or 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, the applicable Pooling and Servicing
Agreement or the applicable Terms Agreement, except such as has already
been made or obtained or as may be required under the 1933 Act, the
Regulations, or state securities or Blue Sky laws.
(i) 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.
(j) As of the applicable Closing Time, the applicable Mortgage Loans
constituting a portion of the Trust Fund will have been duly and validly
assigned to the Trustee in accordance with the applicable Pooling and
Servicing Agreement; and when such assignment is effected, a duly and
validly perfected transfer of all such Mortgage Loans subject to no prior
lien, mortgage, security interest, pledge, charge or other encumbrance
created by the Company will occur.
(k) As of the applicable Closing Time, each of the applicable
Mortgage Loans will meet the eligibility criteria described in the
Prospectus.
(l) Neither the Company nor the Trust Fund created by the applicable
Pooling and Servicing Agreement will be subject to registration as an
"investment company" under the Investment Company Act of 1940, as amended
(the "1940 Act").
(m) The applicable Certificates, the applicable Pooling and
Servicing Agreement and the applicable Terms Agreement conform in all
material respects to the descriptions thereof contained in the Prospectus.
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(n) At the applicable Closing Time, the applicable Certificates
shall have received the certificate rating or ratings specified in the
related Terms Agreement.
(o) At the applicable Closing Time, each of the representations and
warranties of the Company set forth in the applicable Pooling and
Servicing Agreement will be true and correct.
(p) As of the applicable Closing Time, the applicable Pooling and
Servicing Agreement will have been duly authorized, executed and delivered
by, and will constitute a legal, valid and binding obligation of, the
applicable master servicer, enforceable against such master servicer in
accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights generally and as to enforceability, to general
principles of equity (regardless whether enforcement is sought in a
proceeding in equity or at law).
The Company shall not be deemed to have made the representations and
warranties contained in clause (p) with respect to, and to the extent of,
representations and warranties made to the Underwriter by such master servicer
as to the matters covered in such clause in a certificate in form satisfactory
to your counsel and delivered to the Underwriter at the applicable Closing Time.
Any certificate signed by an officer of the Company or an applicable
master servicer and delivered to the Underwriter or counsel for the Underwriter
in connection with an offering of Certificates shall be deemed, and shall state
that it is, a representation and warranty as to the matters covered thereby to
each person to whom the representations and warranties in this Section 1 are
made.
The Company believes that it is justified in relying on any of the
representations, opinions and certificates relied upon by the Company or
furnished to the Underwriter as described above.
SECTION 2. Purchase and Sale. The commitment of the Underwriter to
purchase Certificates pursuant to any Terms Agreements shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Certificates
to be purchased by the Underwriter shall be made at the offices of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, New York, New York, or at such other place as shall be agreed upon
by the Underwriter and the Company, at such time or date as shall be
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agreed upon by the Underwriter and the Company in the Terms Agreement (each such
time and date being referred to as a "Closing Time"). Unless otherwise specified
in the applicable Terms Agreement, payment shall be made to the Company, at the
option of the Company, either (a) by certified or official bank check or checks
in New York Clearing House or similar next day funds payable to the order of the
Company, or (b)in immediately available Federal funds wired to such bank as may
be designated by the Company. Such Certificates shall be in such denominations
and registered in such names as the Underwriter may request in writing at least
two business days prior to the applicable Closing Time. Such Certificates, which
may be in temporary form, will be made available for examination and packaging
by the Underwriter no later than 12:00 noon on the first business day prior to
the applicable Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
(a) Immediately following the execution of each Terms Agreement, the
Company will prepare a Prospectus Supplement setting forth the principal
amount of Certificates covered thereby, the price or prices at which such
Certificates are to be purchased by the Underwriter from the Trust, either
the initial public offering price or prices or the method by which the
price or prices by which such Certificates are to be sold will be
determined, the selling concession(s) and reallowance(s), if any, any
delayed delivery arrangements, and such other information as the
Underwriter and the Company deem appropriate in connection with the
offering of such Certificates. The Company will promptly transmit copies
of the Prospectus Supplement to the Commission for filing pursuant to Rule
424 under the 1933 Act and will furnish to the Underwriter as many copies
of the Prospectus and such Prospectus Supplement as the Underwriter shall
reasonably request.
(b) If at any time when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of any Certificates by the
Underwriter, any event shall occur or condition exist as a result of which
it is necessary, in the opinion of your counsel, counsel for the Company,
or otherwise, to further amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of circumstances existing at the time it is delivered to a
purchaser, not misleading or if it shall be necessary, in the opinion of
any such counsel or otherwise, at any such time to amend or supplement
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the Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the Regulations thereunder, the Company
will promptly prepare and file with the Commission such amendment or
supplement as may be necessary to correct such untrue statement or
omission or to make the Registration Statement comply with such
requirements, and within two business days will furnish to the Underwriter
as many copies of the Prospectus, as so amended or supplemented, as the
Underwriter shall reasonably request.
(c) The Company will give the Underwriter reasonable notice of its
intention to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to the 1933
Act or otherwise, will furnish the Underwriter with copies of any such
amendment or supplement or other documents proposed to be filed a
reasonable time in advance of filing, and will not file any such amendment
or supplement or other documents in a form to which the Underwriter or
your counsel shall object.
(d) The Company will notify the Underwriter immediately, and confirm
the notice in writing, (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of any supplement to the Prospectus or any document
other than quarterly and annual reports to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), (iii) of the
receipt of any comments from the Commission with respect to the
Registration Statement, the Prospectus or any Prospectus Supplement, (iv)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any such stop order
and, if any such stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(e) The Company will deliver to the Underwriter as many signed and
as many conformed copies of the Registration Statement and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated by reference in the
Prospectus) as you may reasonably request.
(f) The Company will endeavor, in cooperation with the Underwriter,
to qualify the Certificates for offering
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and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriter may designate, and
will maintain or cause to be maintained such qualifications in effect for
as long as may be required for the distribution of the Certificates. The
Company will file or cause the filing of such statements and reports as
may be required by the laws of each jurisdiction in which the Certificates
have been qualified as above provided.
(g) If the Company has elected to cause the applicable Pool to be
treated as a real estate mortgage investment conduit (a "REMIC"), the
Company will prepare, or cause to be prepared, and file, or cause to be
filed a timely election to treat the Pool as a REMIC for federal income
tax purposes and will file, or cause to be filed, such tax returns and
take such actions, all on a timely basis, as are required to elect and
maintain such status.
(h) The Company will file with the Commission within fifteen days of
the issuance of the Certificates a current report on Form 8-K setting
forth specific information concerning the Certificates and the Pool to the
extent that such information is not set forth in the Prospectus. The
Company will also file with the Commission a current report on Form 8-K
setting forth all Computational Materials, ABS Term Sheets and Collateral
Term Sheets (as such terms are defined below) provided to the Company by
the Underwriter within the applicable time periods allotted for such
filing pursuant to the No-Action Letters (as defined below).
(i) In connection with any Computational Materials, ABS Term Sheets
or Collateral Term Sheets provided by the Underwriter pursuant to Section
5, the Company must receive a letter from Deloitte & Touche, LLP,
certified public accountants, satisfactory in form and substance to the
Company, to the effect that such accountants have performed certain
specified procedures, all of which have been agreed to by the Company, as
a result of which they have determined that the information included in
the Computational Materials, ABS Term Sheets or Collateral Term Sheets (if
any), provided by the Underwriter to the Company for filing on Form 8-K
pursuant to Section 5 and subsection (h), is accurate except as to such
matters that are not deemed by the Company to be material. The foregoing
letter shall be obtained at the expense of the Company.
(j) In the event that the Underwriter must prepare corrected
Computational Materials, ABS Term Sheets or Collateral Term Sheets
pursuant to Section 5(d), the
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Company shall file any corrected Computational Materials, ABS Term Sheets
or Collateral Term Sheets no later than two days following receipt
thereof.
SECTION 4. Conditions of Underwriter's Obligations. The obligations
of the Underwriter to purchase Certificates pursuant to any Terms Agreement are
subject to the accuracy of the representations and warranties on the part of the
Company herein contained, to the accuracy of the statements of the Company's
officers made pursuant hereto, to the performance by the Company of all of its
obligations hereunder and to the following further conditions:
(a) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued or
proceedings therefor initiated or threatened by the Commission, (ii) the
Certificates shall have received the rating or ratings specified in the
applicable Terms Agreement, and (iii) there shall not have come to your
attention any facts that would cause the Underwriter to believe that the
Prospectus, together with the applicable Prospectus Supplement at the time
it was required to be delivered to a purchaser of the Certificates,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light
of the circumstances existing at such time, not misleading.
(b) At the applicable Closing Time the Underwriter
shall have received:
(1) The favorable opinion, dated as of the applicable Closing
Time, of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, special counsel for the Company, as
sponsor and master servicer of the applicable Mortgage Loans, in
form and substance satisfactory to the Underwriter and your counsel,
to the effect that:
(i) This Agreement and the applicable Terms Agreement have
been duly authorized, executed and delivered by the
Company, and each is a valid and binding obligation of
the Company enforceable against the Company in
accordance with its terms, except that (A) such
enforcement may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
or secured parties' rights generally, (B) such
enforcement may be limited by general
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principles of equity, including (without limitation)
concepts of materiality, reasonableness, good faith and
fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of
whether enforcement is sought in a proceeding in equity
or at law), and (C) the enforceability as to rights to
indemnity thereunder is subject to the effect of federal
and state securities laws and public policy relating
thereto.
(ii) The applicable Pooling and Servicing Agreement and the
Registration Statement have been duly authorized,
executed and delivered by the Company, and are the valid
and binding obligations of the Company enforceable
against the Company in accordance with its terms, except
that (A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (B) such enforcement may be limited
by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law).
(iii) The applicable Certificates have been duly authorized
and, when executed and authenticated as specified in the
applicable Pooling and Servicing Agreement and delivered
and paid for pursuant to this Agreement and the
applicable Terms Agreement, will be duly issued and
entitled to the benefits of the applicable Pooling and
Servicing Agreement.
(iv) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval,
authorization or order of any New York or federal court
or governmental authority or agency is required to be
obtained by the Company for the consummation by the
Company of the transactions contemplated by the
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applicable Pooling and Servicing Agreement, except such
as has already been made or obtained or as may be
required under the 1933 Act or the Regulations, or state
securities or Blue Sky laws.
(v) The Registration Statement is effective under the 1933
Act and, to the best of such counsel's knowledge and
information, no stop order suspending the effectiveness
of the Registration Statement has been issued under the
1933 Act or proceedings therefor initiated or threatened
by the Commission.
(vi) The applicable Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act
of 1939, as amended.
(vii) The conditions to the use by the Company of a
registration statement on Form S-3 under the 1933 Act,
as set forth in the General Instructions to Form S-3,
have been satisfied with respect to the Registration
Statement and the Prospectus. To the best of such
counsel's knowledge, there are no contracts or documents
of the Company which are required to be filed as
exhibits to the Registration Statement pursuant to the
1933 Act or the Regulations thereunder which have not
been so filed or incorporated by reference.
(viii) The statements in the applicable Prospectus Supplement
under the headings "Summary - Federal Tax Aspects" and
"Federal Income Tax Considerations" and the statements
in the Prospectus under the heading "Federal Income Tax
Considerations," to the extent that they constitute
statements of law or legal conclusions as to the likely
outcome of material issues under the federal income tax
laws, have been prepared or reviewed by such counsel and
are correct in all material respects.
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(ix) The Trust created by the applicable Pooling and
Servicing Agreement is not, and will not as a result of
the offer and sale of the applicable Certificates as
contemplated in the Prospectus and in this Agreement
become, an "investment company" or "under the control of
an investment company" as such terms are defined in the
1940 Act.
(x) The statements in the Prospectus under the caption
"Description of the Securities" and in the applicable
Prospectus Supplement under the caption "Description of
the Certificates," insofar as such statements purport to
summarize certain terms of the applicable Certificates
and the applicable Pooling and Servicing Agreement,
constitute a fair and accurate summary of such
documents.
(xi) The Registration Statement and the Prospectus (other
than the financial statements and other financial,
statistical and numerical information included therein,
as to which no opinion need be rendered) as of their
respective effective or issue dates, complied as to form
in all material respects with the requirements of the
1933 Act and the Regulations thereunder.
(xii) The execution, delivery and performance by the Company
of the applicable Pooling and Servicing Agreement do not
require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other
action in respect of any federal, state or other
governmental agency or authority which has not
previously been effected.
(xiii) The applicable Pooling and Servicing Agreement creates
a valid security interest in favor of the applicable
Trustee in the applicable Mortgage Loans and other
property included in the applicable Trust Fund on the
date hereof, which security interest of such Trustee in
such Mortgage Loans and the Trust Fund will be perfected
and will
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constitute a first perfected security interest upon such
Trustee's taking possession of such Mortgage Loans and
the filing of Uniform Commercial Code ("UCC") financing
statements in the offices of the Secretary of State of
California; provided, however, that such counsel may
take customary exceptions acceptable to the Underwriter.
Such counsel shall deliver to the Underwriter such additional
opinions addressing the transfer by the Company to the Trustee of
its right title and interest in and to the applicable Mortgage Loans
and other property included in the applicable Trust Fund on the
applicable Closing Time as may be required by each Rating Agency
rating the applicable Certificates.
Such counsel shall state that it has participated in the
conferences with officers and other representatives of the Company,
your counsel, representatives of the independent accountants for the
Company and the Underwriter at which the contents of the
Registration Statement and the Prospectus were discussed and,
although such counsel is not passing upon and does not assume
responsibility for, the factual accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus (except as stated in paragraphs (xii) and (xiv) above)
and has made no independent check or verification thereof for the
purpose of rendering this opinion, on the basis of the foregoing
(relying as to materiality to a large extent upon the certificates
of officers and other representatives of the Company), nothing has
come to their attention that leads such counsel to believe that the
Registration Statement, when it became effective, contained any
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 or that the Registration Statement
and the Prospectus on the date of the applicable Terms Agreement
contained, and the Prospectus on the date hereof contains, any
untrue statement of a material fact or omitted or omits 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, except that such counsel need express no view with
respect to the financial statements,
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schedules and other financial, statistical and numerical data
included in or incorporated by reference into the Registration
Statement or the Prospectus.
Said counsel may state that they are admitted to practice only
in the State of New York, that they are not admitted to the Bar in
any other State and are not experts in the law of any other State
and to the extent that the foregoing opinions concern the laws of
any other State such counsel may rely upon the opinion of counsel
satisfactory to the Underwriter and admitted to practice in such
jurisdiction. Any opinions relied upon by such counsel as aforesaid
shall be addressed to the Underwriter and shall be delivered
together with the opinion of such counsel, which shall state that
such counsel believes that their reliance thereon is justified.
(2) The favorable opinion, dated as of the applicable Closing
Time, of ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., General Counsel to the Company, as
sponsor and master servicer of the applicable Mortgage Loans, in
form and substance satisfactory to you and your counsel, to the
effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the
laws of the State of California.
(ii) The Company is qualified to do business, and is in
good standing, as a foreign corporation in each U.S.
jurisdiction in which the character of the business
owned or leased by it makes such qualification
necessary, except where the failure to be so qualified
would not have a material adverse effect on the
financial condition of the Company.
(iii) There is no pending or, to the best of such counsel's
knowledge threatened litigation or administrative
proceeding of or before any court, tribunal or
governmental agency, authority or body or any arbitrator
which, if adversely determined, would have a material
adverse effect on the financial condition of the
Company.
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(iv) The execution and delivery by the Company of this
Agreement, the applicable Terms Agreement and the
applicable Pooling and Servicing Agreement and the
signing of the Registration Statement by the Company are
within the corporate power of the Company and have been
duly authorized by all necessary corporate action on the
part of the Company.
(v) None of the transfer of the applicable Mortgage Loans to
the applicable Trust, the issue and sale of the
applicable Certificates or the consummation of the
transactions contemplated herein nor the fulfillment of
the terms hereof will, to the best of such counsel's
knowledge, conflict with or constitute a breach of, or
default under, any 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 the property or assets of the Company are subject
(which contracts, indentures, mortgages, loan
agreements, notes, leases and other such instruments
have been identified by the Company to such counsel),
nor will such action result in any violation of the
provisions of the articles of incorporation or by-laws
of the Company or, to the best of such counsel's
knowledge, any order or regulation known to such counsel
to be applicable to the Company of any state or federal
court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over
the Company.
(vi) To such counsel's knowledge, there are no pending or
overtly threatened lawsuits or claims against the
Company or relating to the transactions contemplated by
this Agreement and the applicable Pooling and Servicing
Agreement which, if adversely determined, would have a
material adverse effect on the transactions contemplated
by this Agreement and the applicable Pooling and
Servicing Agreement.
16
(3) The favorable opinion of counsel to the applicable
Trustee, dated as of the applicable Closing Time, addressed to you
and in form and scope satisfactory to your counsel, to the effect
that:
(i) The applicable Trustee has duly authorized, executed and
delivered the applicable Pooling and Servicing Agreement
and such Pooling and Servicing Agreement is enforceable
against such Trustee in accordance with its terms,
except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights in
general and by general principles of equity regardless
of whether such enforcement is considered in a
proceeding in equity or at law.
(ii) The applicable Trustee has full power and authority to
execute and deliver the applicable Pooling and Servicing
Agreement and to perform its obligations thereunder.
(iii) No consent, approval or authorization of, or
registration, declaration or filing with, any court or
governmental agency or body of the jurisdiction of
incorporation of the applicable Trustee is required for
the execution, delivery or performance by such Trustee
of the applicable Pooling and Servicing Agreement.
In rendering such opinion, such counsel may rely, as to
matters of fact, to the extent deemed proper and stated therein, on
certificates of responsible officers of the applicable Trustee or
public officials.
(4) The favorable opinion or opinions, dated as of the
applicable Closing Time, of counsel for the Underwriter with respect
to the issue and sale of the Certificates, the Registration
Statement, this Agreement, the Prospectus, the applicable Prospectus
Supplement and other related matters as the Underwriter may require.
17
(c) At the applicable Closing Time you shall have received a
certificate of the President or a Vice President of the Company, dated as
of such Closing Time, to the effect that the representations and
warranties of the Company contained in Section 1 are true and correct with
the same force and effect as though such Closing Time were a
Representation Date.
(d) The Underwriter shall have received from Deloitte & Touche, LLP,
or other independent certified public accountants acceptable to you, a
letter, dated as of the date of the applicable Terms Agreement and as of
the applicable Closing Time, delivered at such times, in the form
heretofore agreed to.
(e) At the applicable Closing Time the Underwriter shall have
received, addressed to you, any additional opinions delivered by counsel
pursuant to the request of the Rating Agency or Rating Agencies rating the
applicable Certificates.
(f) At the applicable Closing Time, counsel for the Underwriter
shall have been furnished with such documents and opinions as they
reasonably may require for the purpose of enabling them to pass upon the
issuance and sale of the applicable Certificates as herein contemplated
and related proceedings or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the applicable Certificates as herein contemplated shall be
satisfactory in form and substance to the Underwriter and counsel for the
Underwriter.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to the Company at any time at or prior to the
applicable Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 6.
SECTION 5. Investor Information. The Underwriter may prepare and
provide to prospective investors certain Computational Materials, ABS Term
Sheets or Collateral Term Sheets in connection with its offering of the
Certificates, subject to the following conditions:
(a) The Underwriter shall comply with the requirements of the
No-Action Letter of May 20, 1994 issued by the Commission to ▇▇▇▇▇▇,
Peabody Acceptance Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co. Incorporated and
18
▇▇▇▇▇▇ Structured Asset Corporation, as made applicable to other issuers
and underwriters by the Commission in response to the request of the
Public Securities Association dated May 24, 1994 (collectively, the
"▇▇▇▇▇▇/PSA Letter"), and the requirements of the No-Action Letter of
February 17, 1995 issued by the Commission to the Public Securities
Association (the "PSA Letter" and, together with the ▇▇▇▇▇▇/PSA Letter,
the "No-Action Letters").
(b) For purposes hereof, "Computational Materials" shall have the
meaning given such term in the No-Action Letters, but shall include only
those Computational Material that have been prepared or delivered to
prospective investors by the Underwriter. For purposes hereof, "ABS Term
Sheets" and "Collateral Term Sheets" shall have the meanings given such
terms in the PSA Letter but shall include only those ABS Term Sheets or
Collateral Term Sheets that have been prepared or delivered to prospective
investors by the Underwriter.
(c) The Underwriter shall provide to the Company any Computational
Materials, ABS Term Sheets or Collateral Term Sheets which are provided to
investors no later than the date preceding the date such Computational
Materials, ABS Term Sheets or Collateral Term Sheets are required to be
filed pursuant to the applicable No-Action Letters. The Underwriter may
provide copies of the foregoing in a consolidated or aggregated form
including all information required to be filed.
(d) In the event that the Company or the Underwriter discovers an
error in the Computational Materials, ABS Term Sheets or Collateral Term
Sheets, the Underwriter that prepared such material shall prepare
corrected Computation Materials, ABS Term Sheets or Collateral Term Sheets
and deliver it to the Company for filing pursuant to Section 3(h).
SECTION 6. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
without limitation those related to (i) the filing of the Registration Statement
and all amendments thereto, (ii) the printing and delivery to the Underwriter,
in such quantities as you may reasonably request, of copies of this Agreement
and each Terms Agreement, (iii) the preparation, issuance and delivery of the
Certificates to the Underwriter, (iv) the fees and disbursements of the
Company's counsel and accountants, (v) the qualification of the Certificates
under securities and Blue Sky laws and the determination of the eligibility of
the Certificates for investment in accordance with the provisions of Section
3(f), including filing fees, and the fees and
19
disbursements of counsel for the Underwriter in connection therewith and in
connection with the preparation of any Blue Sky Survey and Legal Investment
Survey, (vi) the printing and delivery to the Underwriter, in such quantities as
you may reasonably request, hereinafter stated, of copies of the Registration
Statement and Prospectus and all amendments and supplements thereto, and of any
Blue Sky Survey and Legal Investment Survey, (vii) the printing and delivery to
the Underwriter, in such quantities as you may reasonably request, of copies of
the Pooling and Servicing Agreement, (viii) the fees charged by investment
rating agencies for rating the Certificates, (ix) the fees and expenses incurred
in connection with the listing of the Certificates on any national securities
exchange, (x) the fees and expenses incurred with respect to the National
Association of Securities Dealers, Inc., including the fees and disbursements of
counsel for the Underwriter in connection therewith and (xi) the fees and
expenses of the Trustee and its counsel.
If a Terms Agreement is terminated by the Underwriter in accordance
with the provisions of Section 4 or Section 10(i) hereof, the Company shall
reimburse the Underwriter for all reasonable out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriter.
SECTION 7. Indemnification. (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 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred (x) arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or (y) arising out of any
untrue statement or alleged untrue statement of a material fact contained
in the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading, unless, under either clause (x) or (y),
such untrue statement or omission or alleged untrue statement or omission
was made in reliance upon and in conformity with written information
furnished to the Company by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto);
20
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Computational
Materials, ABS Term Sheets or Collateral Term Sheets distributed by the
Underwriter; unless such untrue statement or alleged untrue statement of a
material fact was made in reliance upon and in conformity with Derived
Information (as defined below) provided by the Underwriter expressly for
use in the Computational Materials, the ABS Term Sheets or the Collateral
Term Sheets and the untrue statement or alleged untrue statement did not
derive from an inaccuracy in the Seller-Provided Information (as defined
below) used in the preparation of such Computational Materials, ABS Term
Sheets or Collateral Term Sheets;
(iii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iv) against any and all expense whatsoever (including the
fees and disbursements of counsel chosen by you with the Company's
consent, subject to the restrictions contained in subsection (c) of this
Section, reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, to the extent that any such
expense is not paid under (i), (ii) or (iii) above).
This indemnity agreement will be in addition to any liability which
the Company may otherwise have. Insofar as this indemnity may permit
indemnification for liabilities under the 1933 Act of any person who is a
partner of the Underwriter entitled to indemnity hereby or who controls the
Underwriter within the meaning of Section 15 of the 1933 Act and who, at the
date of this Agreement, is a director, officer or controlling person of the
Company, such indemnity agreement is subject to the undertaking of the Company
in the Registration Statement.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, each of the Company's directors, each of the Company's officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act as follows:
21
(i) against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by the Underwriter
expressly for use in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto); and
(ii) against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
alleged untrue statements made in the Computational Materials, Collateral
Term Sheets or ABS Term Sheets to the extent that such untrue statement or
alleged untrue statement of a material fact was made in reliance upon and
in conformity with Derived Information provided by the Underwriter
expressly for use in the Computational Materials, the ABS Term Sheets or
the Collateral Term Sheets and the untrue statements or alleged untrue
statements did not derive from an inaccuracy in the Seller-Provided
Information used in the preparation of such Computational Materials, ABS
Term Sheets or Collateral Term Sheets.
This indemnity agreement will be in addition to any liability which
the Underwriter may otherwise have.
For purposes of this Agreement, as to the Underwriter, "Derived
Information" means such portion, if any, of the information delivered to the
Company by the Underwriter pursuant to Section 5 for filing with the Commission
on Form 8-K and:
(i) is not contained in the Prospectus, or is furnished by the
Underwriter for use in the Prospectus, without taking into account
information incorporated therein by reference; and
(ii) does not constitute Seller-Provided Information.
"Seller-Provided Information" means any computer tape (or other information)
furnished to the Underwriter by or on behalf of the Company concerning the
assets of the Trust Fund.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it
22
with respect to which indemnity may be sought hereunder but failure to so notify
an indemnifying party shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. In no event shall
the indemnifying parties be liable for the fees and expenses of more than one
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
SECTION 8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 7 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company on the one
hand, and the Underwriter, on the other, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Company and the Underwriter in such
proportions that the Underwriter is responsible for that portion represented by
the percentage that the underwriting discount or discounts on the cover of such
Prospectus Supplement bears to the initial public offering price or prices as
set forth thereon and the Company shall be responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation and,
provided further, the Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price of the Certificates purchased
by such Underwriter pursuant to the Terms Agreement exceeds the amount of any
damages which the Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. For purposes of this Section, each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Underwriter and each director of the Company, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Company.
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
pursuant hereto, shall remain operative and in full force and effect, regardless
of any termination of this Agreement, or any investigation made by or on behalf
of the Underwriter or
23
controlling person thereof, or by or on behalf of the Company and shall survive
delivery of any Certificates to the Underwriter.
SECTION 10. Termination of Agreement. This Agreement may be
terminated for any reason at any time by either the Company or the Underwriter
upon the giving of thirty days' written notice of such termination to the other
party hereto. You may also terminate a Terms Agreement, immediately upon notice
to the Company, at any time at or prior to the applicable Closing Time (i) if
there has been, since the date of such Terms Agreement or since the respective
dates as of which information is given in the Registration Statement or
Prospectus any change, or any development involving a prospective change in, or
affecting, the condition, financial or otherwise, earnings, affairs or business
of the Company whether or not arising in the ordinary course of business, which
in your judgment would materially impair the market for, or the investment
quality of, the Certificates, or (ii) if there has occurred any outbreak of
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable to market the Certificates or enforce contracts for the sale of
the Certificates, or (iii) if trading generally on either the New York Stock
Exchange or the American Stock Exchange has been suspended, or minimum or
maximum 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 or New York authorities. In the
event of any such termination, (A) the covenants set forth in Section 3 with
respect to any offering of Certificates shall remain in effect so long as the
Underwriter own any such Certificates purchased from the Company pursuant to the
applicable Terms Agreement and (B) the covenant set forth in Section 3(c), the
provisions of Section 6, the indemnity agreement set forth in Section 7, and the
contribution provisions set forth in Section 8, and the provisions of Sections 9
and 14 shall remain in effect.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to you at the address set forth on the first page
hereof, attention of the [▇▇▇▇▇▇ to provide]. Notices to the Company shall be
directed to Accredited Home Lenders, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of the President, with a copy to the Executive Vice
President.
SECTION 12. Parties. This Agreement shall inure to the benefit of
and be binding upon you and the Company and any
24
Terms Agreement shall inure to the benefit of and be binding upon the Company
and the Underwriter, and its successors. Nothing expressed or mentioned in this
Agreement or a Terms Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto or thereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 7 and 8 and their heirs and legal representatives any
legal or equitable right, remedy or claim under or with respect to this
Agreement or a Terms Agreement or any provision herein or therein contained.
This Agreement and any Terms Agreement and all conditions and provisions hereof
or thereof are intended to be for the sole and exclusive benefit of the parties
and their respective successors and said controlling persons and officers and
directors and their heirs and legal representatives (to the extent of their
rights as specified herein and therein) and for the benefit of no other person,
firm or corporation. No purchaser of Certificates from the Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement and each Terms
Agreement shall be governed by the laws of the State of New York. Specified
times of day refer to New York City time.
SECTION 14. Counterparts. This Agreement and any Terms Agreement may
be executed in counterparts, each of which shall constitute an original of any
party whose signature appears on it, and all of which shall together constitute
a single instrument.
[Remainder of Page Intentionally Left Blank]
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and the Company in accordance with its terms.
Very truly yours,
ACCREDITED HOME LENDERS, INC.
By:/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
▇▇▇▇▇▇ BROTHERS INC.
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
Exhibit A
ACCREDITED HOME LENDERS, INC.,
SPONSOR AND MASTER SERVICER
Mortgage Loan Asset-Backed Certificates,
Series 1996-__
Classes __
FORM OF TERMS AGREEMENT
Dated: _______, 1996
To: Accredited Home Lenders, Inc., (the "Company") under the
Pooling and Servicing Agreement, dated as of _______ 1,
1996 (the "Pooling and Servicing Agreement")
Re: Underwriting Agreement dated _______, 1996
Series Designation: Mortgage Loan Asset-Backed Certificates,
Series 1996-_, Class
Underwriter: ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇ Brothers")
Terms of the Certificates:
Original
Principal Remittance
Class Amount* Rate
----- --------- ----------
* Approximate. Subject to permitted variance of plus or minus 5%.
Certificate Ratings:
REMIC Election:
The Company intends to elect to cause the Trust to be treated as a REMIC.
A-1
Master Servicer:
Accredited Home Lenders, Inc. (in such capacity, the
"Master Servicer")
Trust:
The Trust shall include mortgage loans ("Mortgage Loans") conveyed by the
Company listed in an exhibit to the assignment by the Company to the Trustee of
such loans.
Credit Enhancement:
Payment Dates:
Purchase Price:
Payment of the purchase price shall be in immediately available Federal
funds wired to such bank as may be designated by the Company.
Underwriting Commission:
Notwithstanding anything to the contrary in the Underwriting Agreement, no
additional underwriting commission shall be payable by the Company to the
Underwriter in connection with the purchase of the Certificates.
Public Offering price and/or method of determining price at which the
Underwriter will sell the Certificates:
Class :
Class :
Class :
Class :
Class :
Class :
Closing Date and Location:
On or about _______, 1996, at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, New York,
New York.
A-2
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and the Company in accordance with its terms.
▇▇▇▇▇▇ BROTHERS INC.
By:__________________________________
Name:
Title:
ACCEPTED:
ACCREDITED HOME LENDERS, INC.
By:_____________________________
Name:
Title:
A-3
