EXHIBIT 1.1
PREFERRED CREDIT OWNER TRUSTS
ASSET-BACKED SECURITIES
(Issuable in Series)
UNDERWRITING AGREEMENT
[NAME AND ADDRESS [DATE]
OF UNDERWRITER(S)]
Ladies and Gentlemen:
Preferred Securitization Corporation, a corporation organized and
existing under the laws of the State of Delaware (the "Company"), proposes to
cause Preferred Credit Owner Trusts (each, a "Trust") to offer for sale from
time to time its Asset-Backed Securities evidencing interests in pools of
certain contracts and mortgage loans (the "Securities"). The Securities may be
issued in various series, and within each series, in one or more classes, in one
or more offerings on terms determined at the time of sale (each such series, a
"Series" and each such class, a "Class"). Each Trust may issue one or more
classes of Asset-Backed Notes (the "Notes") pursuant to an Indenture to be dated
as of the respective cut-off date (each, a "Cut-off Date") as supplemented by
one or more supplements to such Indenture (such Indenture, as supplemented, the
"Indenture") between the owner trustee named therein (the "Owner Trustee") and
the indenture trustee named therein (the "Indenture Trustee"). Simultaneously
with the issuance of the Notes, the Trust may issue Asset-Backed Certificates
(the "Certificates"), each representing a fractional undivided ownership
interest in the related Trust, pursuant to a separate Trust Agreement (each, a
"Trust Agreement") to be dated as of the respective Cut-off Date among the
Company or one of its affiliates, (Preferred Mortgage SPC Funding Corp.) and the
Owner Trustee.
The assets of each Trust will consist primarily of a pool of fixed- or
adjustable-rate, fully-amortizing property improvement and/or debt consolidation
loans, and the related notes and mortgages (collectively, the "Mortgage Loans")
having the original terms to maturity and interest rate types specified in the
related Terms Agreement referred to hereinbelow.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned thereto in the related sale and servicing agreement to be
dated as of the applicable Cut-off Date (the "Sale and Servicing Agreement"),
among the Company as depositor (the "Depositor"), the related Trust, Preferred
Credit Corporation, as transferor (the ATransferor@), and Advanta Mortgage Corp.
U.S.A. as the servicer, (the AServicer@), or, if not defined therein, in the
respective Indenture or Trust Agreement.
If and to the extent specified in the related Sale and Servicing
Agreement, in addition to the Mortgage Loans conveyed to the Trust on the
Closing Date (such Mortgage Loans so conveyed to the Trust at such time, the
"Initial Mortgage Loans"), the Depositor shall be obligated to convey to the
Trust, from time to time during the period commencing after the Closing Date and
ending at the expiration of the period specified in such Sale and Servicing
Agreement (each, a "Pre-Funding Period") (the date of any such conveyance, a
"Subsequent Transfer Date"), additional Mortgage Loans (any such additional
Mortgage Loans so conveyed to the Trust through the Pre-Funding Period, the
"Subsequent Mortgage Loans").
The Securities may have the benefit of one or more insurance policies
(each, a "Policy") issued by the insurer named therein (the "Insurer") pursuant
to an indemnity and insurance agreement among the Depositor, the Owner Trustee,
the Indenture Trustee, the Servicer and the Insurer (the "Insurance Agreement").
Underwritten offerings of Securities may be made through you or
through an underwriting syndicate managed by you. The Company proposes to sell
one or more Series of the Securities to you and to each of the other several
underwriters, if any, participating in an underwriting syndicate managed by you.
Whenever the Company determines to make an offering of Securities
(each, an "Offering") pursuant to this Agreement through you, it will enter into
an agreement (the "Terms Agreement") providing for the sale of specified Classes
of Offered Securities (as defined below) to, and the purchase and public
offering thereof by, you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on their behalf (the
underwriters designated in any such Terms Agreement being referred to herein as
"Underwriters," which term shall include you whether acting alone in the sale of
any Offered Securities of any series or as a member of an underwriting
syndicate). Each such Offering which the Company elects to make pursuant to this
Agreement shall be governed by this Agreement, as supplemented by the related
Terms Agreement, and this Agreement and such Terms Agreement shall inure to the
benefit of and be binding upon each underwriter participating in the offering of
such Offered Securities. Each Terms Agreement, which shall be substantially in
the form of Exhibit A hereto, shall specify, among other things, the Classes of
Securities to be purchased by the Underwriters (the "Offered Securities"),
whether such Offered Securities constitute Notes or Certificates, the principal
balance or balances of the Offered Securities, each subject to any stated
variance, the names of the Underwriters participating in such offering (subject
to substitution as provided in Section 13 hereof) and the price or prices at
which such Offered Securities are to be purchased by the Underwriters from the
Company.
1. Representations and Warranties. (a) The Company and the Transferor
represent and warrant to and agree with the Underwriters, as of the date of the
related Terms Agreement, that:
(i) The registration statement specified in the related Terms
Agreement, on Form S-3, including a prospectus, has been filed with
the Securities and Exchange Commission (the "Commission") for the
registration under the Securities Act of 1933, as amended (the "Act"),
of asset-backed securities issuable in series, which registration
statement has been declared effective by the Commission. Such
registration statement, as amended to the date of the related Terms
Agreement, including any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act which were filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
on or before the effective date of the Registration Statement, is
hereinafter called the "Registration Statement," and such prospectus,
as such prospectus is supplemented by a prospectus supplement relating
to the Offered Securities of the related Series, each in the form
first filed via XXXXX by a financial printer or another person
designated by the Company (the "Financial Printer") after the date of
the related Terms Agreement pursuant to Rule 424(b) under the Act,
including any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act which were filed under the Exchange
Act on or before the date of such Prospectus Supplement (other than
any such incorporated documents that relate to Collateral Term Sheets
(as defined herein)) (such prospectus supplement, including such
incorporated documents (other than those that relate to Collateral
Term Sheets), in the form first filed after the date of the related
Terms Agreement pursuant to Rule 424(b) is hereinafter called the
"Prospectus Supplement"), is hereinafter called the "Final
Prospectus". Any preliminary prospectus, including any preliminary
prospectus supplement which, as completed, is proposed to be used in
connection with the sale of a Series of Offered Securities and any
prospectus filed with the Commission pursuant to Rule 424(a) of the
Act is hereinafter referred to as a "Preliminary Prospectus." Any
reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Preliminary
Prospectus, the Final Prospectus or the Prospectus Supplement shall be
deemed to refer to and include the filing of any document under the
Exchange Act after the effective date of the Registration Statement or
the issue date of the Preliminary Prospectus, the Final Prospectus or
Prospectus Supplement, as the case may be, deemed to be incorporated
therein by reference pursuant to Item 12 of Form S-3 under the Act.
(ii) The related Registration Statement, at the time it became
effective, and the prospectus contained therein, and any amendments
thereof and supplements thereto filed prior to the date of the related
Terms Agreement, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder; on the date of the related Terms Agreement and
on each Closing Date (as defined in Section 3 below), the related
Registration Statement and the related Final Prospectus, and any
amendments thereof and supplements thereto, will conform in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder; such Registration Statement,
at the time it became effective, did not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; such Final Prospectus, on the date of any filing pursuant
to Rule 424(b) and on each Closing Date, will not include any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading; and the Form
8-K relating to any Subsequent Mortgage Loans, on the date of any
filing thereof, will not include any untrue statement of a material
fact or omit to state any information which such Final Prospectus
states will be included in such Form 8-K; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from (A) such Registration Statement or such
Final Prospectus (or any supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Underwriters specifically for use in the preparation
thereof or (B) any Current Report (as defined in Section 5(b) below),
or in any amendment thereof or supplement thereto, incorporated by
reference in such Registration Statement or such Final Prospectus (or
any amendment thereof or supplement thereto).
(iii) The Securities of the related Series will conform to the
description thereof contained in the related Final Prospectus; and
will each on the related Closing Date be duly and validly authorized,
and, when validly executed, countersigned, issued and delivered in
accordance with the related Indenture or Trust Agreement, as
applicable, and sold to you as provided herein and in the related
Terms Agreement, will each be validly issued and outstanding and
entitled to the benefits of such Indenture or Trust Agreement, as
applicable, and, if applicable, the related Policy.
(iv) Neither the issuance nor sale of the Securities of the
related Series nor the consummation of any other of the transactions
herein contemplated, nor the fulfillment of the terms hereof or of the
related Terms Agreement, will conflict with any statute, order or
regulation applicable to the Company of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Company or with any organizational document of the Company or any
instrument or any agreement under which the Company is bound or to
which it is a party.
(v) This Agreement and the related Terms Agreement have been duly
authorized, executed and delivered by the Company.
(vi) At or prior to the related Closing Date, the Trust will have
entered into the related Indenture, Trust Agreement and any Insurance
Agreement and, assuming the due authorization, execution and delivery
thereof by the other parties thereto, such Indenture, such Trust
Agreement and such Insurance Agreement (on such Closing Date) will
constitute the valid and binding agreement of the Trust enforceable in
accordance with its terms, subject as to enforceability, to
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights and to general principles of equity (regardless of
whether the enforceability of such Indenture, such Trust Agreement or
such Insurance Agreement is considered in a proceeding in equity or at
law).
(vii) At or prior to the related Closing Date, the Company will
have entered into the related Sale and Servicing Agreement and,
assuming the due authorization, execution and delivery thereof by the
other parties thereto, such Sale and Servicing Agreement (on such
Closing Date) will constitute the valid and binding agreement of the
Company enforceable in accordance with its terms, subject as to
enforceability, to bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights and to general principles of
equity (regardless of whether the enforceability of such Sale and
Servicing Agreement is considered in a proceeding in equity or at
law).
(viii) If applicable, the related Policy, when delivered, will
constitute the legal, valid and bind obligation of the Insurer,
enforceable in accordance with its terms.
(ix) Any funds or accounts established from time to time with
respect to a Series of Securities in accordance with the related
Indenture, Trust Agreement or Sale and Servicing Agreement will have
been properly funded at the Closing Date by the deposit by the
Depositor of the requisite cash therein, in the manner specified by
such Indenture, Trust Agreement or Sale and Servicing Agreement.
(x) The related Trust will have a valid and perfected first
priority security interest in, on the Closing Date, and on any
Subsequent Transfer Date, the Mortgage Loans and any funds or accounts
to be deposited or established with the Indenture Trustee for the
benefit and security of the holders of the related Notes (and in any
cash deposited therein), subject to no prior lien, mortgage, pledge,
charge, security interest, adverse claim or other encumbrance.
(xi) Neither the Depositor, the Transferor, the Trust nor any
funds or accounts established thereunder is an "investment company"
(as defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) or is under the "control" (as such term is defined in the
0000 Xxx) of an "investment company" that is registered or required to
be registered under, or is otherwise subject to the provisions of, the
1940 Act.
2. Purchase and Sale. Subject to the execution of the Terms Agreement
for a particular Offering and subject to the terms and conditions and in
reliance upon the representations and warranties set forth in this Agreement and
such Terms Agreement, the Company agrees to sell to each Underwriter, severally
and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, the respective original principal amounts of the
related Offered Securities set forth in the related Terms Agreement opposite the
name of such Underwriter, plus any additional original principal amount of
Offered Securities which such Underwriter may be obligated to purchase pursuant
to Section 13 hereof, at the purchase price therefor set forth in such Terms
Agreement (the "Purchase Price").
The parties hereto agree that settlement for all securities sold
pursuant to this Agreement shall take place on the terms set forth herein and
not as set forth in Rule 15c6-1(a) under the Exchange Act.
3. Delivery and Payment. Delivery of and payment for the Offered
Securities of a Series shall be made at the offices of Stroock & Stroock & Xxxxx
LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m. New York City time,
on the Closing Date specified in the related Terms Agreement, which date and
time may be postponed by agreement between the Underwriters and the Company
(such date and time being herein called the "Closing Date"). Delivery of such
Offered Securities shall be made to the Underwriters against payment by the
Underwriters of the Purchase Price thereof to or upon the order of the Company
by wire transfer in federal or other immediately available funds. Unless
delivery is made through the facilities of The Depository Trust Company, the
Offered Securities shall be registered in such names and in such authorized
denominations as the Underwriters may request not less than two full business
days in advance of each Closing Date.
The Company agrees to notify the Underwriters at least two business
days before each Closing Date of the exact principal balance evidenced by the
Offered Securities and to have such Offered Securities available for inspection,
checking and packaging in New York, New York, no later than 12:00 noon on the
business day prior to such Closing Date.
4. Offering by the Underwriters. It is understood that the
Underwriters propose to offer the Offered Securities of the related Series for
sale to the public as set forth in the related Final Prospectus.
5. Agreements. The Company and the Transferor agree with the
Underwriters that:
(a) The Company will cause that each of the Preliminary
Prospectus and the Final Prospectus as supplemented by a Prospectus
Supplement relating to the Offered Securities to be filed pursuant to
Rule 424 under the Act and will promptly advise the Underwriters when
such Preliminary Prospectus and such Final Prospectus as so
supplemented has been so filed, and prior to the termination of the
Certificate Offering to which such Preliminary Prospectus and Final
Prospectus relates also will promptly advise the Underwriters (i) when
any amendment to the related Registration Statement specifically
relating to such Offered Securities shall have become effective or any
further supplement to such Preliminary Prospectus or such Final
Prospectus has been filed, (ii) of any request by the Commission for
any amendment of such Registration Statement, Preliminary Prospectus
or Final Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement or the institution or
threatening of any proceeding for that purpose and (iv) of the receipt
by the Company of any written notification with respect to the
suspension of the qualification of such Offered Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will not file any amendment of the
related Registration Statement or supplement to the related
Preliminary Prospectus or Final Prospectus (other than any amendment
or supplement specifically relating to one or more Series of
asset-backed securities other than the Series that includes the
related Offered Securities) unless (i) the Company has given
reasonable notice of its intention to file any such amendment or
supplement, (ii) the Company has furnished the Underwriters with a
copy for their review within a reasonable time prior to filing, and
(iii) the Underwriters do not reasonably object to the filing of such
amendment or supplement. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) The Company will cause any Computational Materials and any
Structural Term Sheets (each as defined in Section 8 below) with
respect to the Offered Securities of a Series that are delivered by an
Underwriter to the Company pursuant to Section 8 to be filed with the
Commission on a Current Report on Form 8-K (a "Current Report")
pursuant to Rule 13a-11 under the Exchange Act in accordance with
Section 10 on the business day immediately following the date on which
the related Terms Agreement is executed and delivered. The Company
will cause any Collateral Term Sheet (as defined in Section 9 below)
with respect to the Offered Securities of a Series that is delivered
by the Underwriters to the Company in accordance with the provisions
of Section 9 to be filed with the Commission on a Current Report
pursuant to Rule 13a-11 under the Exchange Act in accordance with
Section 10 on the business day immediately following the day on which
such Collateral Term Sheet is delivered to counsel for the Company by
the Underwriters prior to 10:30 a.m. New York time In addition, if at
any time prior to the availability of the related Prospectus
Supplement, the Underwriters have delivered to any prospective
investor a subsequent Collateral Term Sheet that reflects, in the
reasonable judgment of the Underwriters and the Company, a material
change in the characteristics of the Mortgage Loans for the related
Series from those on which a Collateral Term Sheet with respect to the
related Series previously filed with the Commission was based, the
Company will cause any such Collateral Term Sheet that is delivered by
the Underwriters to the Company in accordance with the provisions of
Section 9 hereof to be filed with the Commission on a Current Report
in accordance with Section 10. Each such Current Report shall be
incorporated by reference in the related Final Prospectus and the
related Registration Statement.
(c) If, at any time when a prospectus relating to the Offered
Securities of a Series is required to be delivered under the Act, any
event occurs as a result of which the related Final Prospectus as then
amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in light of the circumstances under which they were
made not misleading, or if it shall be necessary at any time to amend
or supplement the related Final Prospectus to comply with the Act or
the rules thereunder, the Company promptly will prepare and file with
the Commission, subject to paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance; provided, however,
that the Company will not be required to file any such amendment or
supplement with respect to any Computational Materials, Structural
Term Sheets or Collateral Term Sheets incorporated by reference in the
Final Prospectus other than any amendments or supplements of such
Computational Materials or Structural Term Sheets that are furnished
to the Company by the Underwriters pursuant to Section 8(e) hereof or
any amendments or supplements of such Collateral Term Sheets that are
furnished to the Company by the Underwriters pursuant to Section 9(d)
hereof which are required to be filed in accordance therewith.
(d) The Company will furnish to the Underwriters and counsel for
the Underwriters, without charge, and, so long as delivery of a
prospectus by the Underwriters or a dealer may be required by the Act,
as many copies of the related Preliminary Prospectus and the related
Final Prospectus and any supplements thereto (other than exhibits to
the related Current Report) as the Underwriters may reasonably
request.
(e) The Company will furnish such information, execute such
instruments and take such actions as may be reasonably requested by
the Underwriters to qualify the Offered Securities of a Series for
sale under the laws of such jurisdictions as the Underwriters may
designate, to maintain such qualifications in effect so long as
required for the distribution of such Offered Securities and to
determine the legality of such Offered Securities for purchase by
investors; provided, however, that the Company shall not be required
to qualify to do business in any jurisdiction where it is not
qualified on the date of the related Terms Agreement or to take any
action which would subject it to general or unlimited service of
process or corporate or franchise taxation as a foreign corporation in
any jurisdiction in which it is not, on the date of the related Terms
Agreement, subject to such service of process.
(f) So long as the Offered Securities of a Series are
outstanding, the Company will furnish to the Underwriters copies of
the annual independent public accountants' servicing report furnished
to the Indenture Trustee pursuant to the related Sale and Servicing
Agreement.
(g) Whether or not the transactions contemplated hereby and by
the related Terms Agreement shall be consummated, the Company shall be
responsible for the payment of any costs and expenses for which
details are submitted, in connection with the performance of its
obligations under this Agreement and the related Terms Agreement,
including, without limitation, (a) the cost and expenses of printing
or otherwise reproducing the related Registration Statement, the
related Preliminary Prospectus, the related Final Prospectus, this
Agreement, the related Terms Agreement, the related Sale and Servicing
Agreement, the related Trust Agreement, the related Indenture and the
Offered Securities, and (b) the cost of delivering the related Offered
Securities to the office of the Underwriters, insured to the
satisfaction of the Underwriters, (c) the fees and disbursements of
the Transferor's and the Servicer's counsel and accountants, (d) the
qualification of the Securities under state securities or blue sky
laws, including filing fees and the fees and disbursements of counsel
for you in connection therewith and in connection with the preparation
of any blue sky survey and legal investment survey, (e) the printing,
word processing and duplicating expenses and supervision related to
preparation of and delivery to the Underwriter of copies of any
document contemplated hereunder and any blue sky survey and legal
investment survey, (f) the fees of rating agencies, (g) the fees and
expenses, if any, incurred in connection with the listing of the
Offered Securities on any national securities exchange, (h) the fees,
if any, of the National Association of Securities Dealers, Inc., and
the fees and expenses of counsel for you in connection with any
required written submission to or appearance before such entity, (i)
the fees and expenses of the Indenture Trustee, the Owner Trustee, any
custodian, the backup servicer and the Insurer, and their respective
counsel, (j) the fees and expenses of your counsel up to $_________
per Certificate Offering, (k) the cost of the accountant's comfort
letter relating to the related Properties, and (l) any such other
related expenses not specified above; provided that, except as
provided in this Section 5(g), the Underwriters shall pay their own
costs and expenses, including the costs and expenses of their counsel,
any transfer taxes on any series of Offered Securities which they may
sell and the expenses of advertising any offering of the Offered
Securities made by the Underwriters, and the Underwriters shall pay
the cost of any accountant's comfort letters relating to any
Computational Materials.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Offered Securities of any Series shall be
subject to the accuracy in all material respects of the representations and
warranties on the part of the Company contained in this Agreement, as
supplemented by the related Terms Agreement, as of the respective dates thereof
and the related Closing Date, to the accuracy of the statements of the Company
made in any applicable officers' certificates pursuant to the provisions hereof,
to the performance by the Company of its obligations under this Agreement and
such Terms Agreement and to the following additional conditions applicable to
the related Offering:
(a) No stop order suspending the effectiveness of the related
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) Stroock & Stroock & Xxxxx LLP, counsel for the Company, shall
have furnished to the Underwriters an opinion, dated the related
Closing Date, to the effect that:
(i) this Agreement and the related Terms Agreement have been
duly executed and delivered by the Company;
(ii) the related Sale and Servicing Agreement has been duly
executed and delivered by the Company and is a legal, valid and
binding agreement of the Company enforceable against the Company
in accordance with its terms;
(iii) each of the related Indenture, Trust Agreement and any
Insurance Agreement has been duly executed and delivered by the
Trust and is a legal, valid and binding agreement of the Trust
enforceable against the Trust in accordance with its terms;
(iv) the Notes, when duly executed and delivered by the
Owner Trustee and when authenticated by the Indenture Trustee in
accordance with the related Indenture, will be validly issued and
outstanding and entitled to the benefits of such Indenture;
(v) the Certificates, when duly executed and delivered by
the Owner Trustee in accordance with the related Trust Agreement,
will be validly issued and outstanding and entitled to the
benefits of such Trust Agreement;
(vi) the related Trust Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended, (the
"Trust Indenture Act") and the Trust created thereunder is not
required to be registered under the 1940Act;
(vii) the Indenture has been duly qualified under the Trust
Indenture Act;
(viii) such counsel confirms that the related Registration
Statement is effective under the Act and, to the best of such
counsel's knowledge, no stop order with respect thereto has been
issued, and no proceeding for that purpose has been instituted or
threatened by the Commission under the Act; such Registration
Statement (except the financial statements and schedules and
other financial and statistical data included therein and the
documents incorporated by reference therein), at the time it
became effective and the related Final Prospectus (except the
financial statements and schedules and the other financial and
statistical data included therein, the documents incorporated by
reference therein and the information included in the first
sentence of the last paragraph on the cover page, the information
under the heading "Underwriting" therein insofar as such
information relates to the offer and sale of the Securities by
the Underwriters, as of the date of the Prospectus Supplement,
conformed in all material respects to the requirements of the Act
and the rules and regulations thereunder; and no information has
come to the attention of such counsel that causes it to believe
that (A) such Registration Statement (except the financial
statements and schedules and the other financial and statistical
data included therein and the documents incorporated by reference
therein) at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (B) such Final Prospectus or any
amendment or supplement thereto (except the financial statements
and schedules and the other financial and statistical data
included therein, the documents incorporated by reference therein
and the information included in the first sentence of the last
paragraph on the cover page, the information under the heading
"Underwriting" therein insofar as such information relates to the
offer and sale of the Securities by the Underwriters), as of the
date of the Prospectus Supplement or at the related Closing Date,
contained or contains an 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;
(ix) the statements set forth under the headings
"Description of the Transfer and Servicing Agreements" and
"Description of the Offered Securities" in the related Final
Prospectus, insofar as such statements purport to summarize
certain provisions of the related Trust Agreement, the related
Indenture, the related Sale and Servicing Agreement" and the
related Offered Securities, provide a fair summary of such
provisions;
(x) the statements set forth in the related Final Prospectus
under the headings "Certain Legal Aspects of the Loan Assets",
"Certain Federal Income Tax Consequences" (insofar as they relate
specifically to the purchase, ownership and disposition of the
related Offered Securities) and "ERISA Considerations" (insofar
as they relate specifically to the purchase, ownership and
disposition of such Offered Securities), to the extent that they
constitute matters of law or legal conclusions, provide a fair
summary of such law or conclusions;
(xi) the statements set forth in the related Final
Prospectus under the heading "Certain Federal Income Tax
Consequences" and in the related Prospectus Supplement under the
heading "Summary of Terms -- Tax Status", to the extent such
statements relate to federal income tax consequences, accurately
describe the material federal income tax consequences to holders
of the Securities.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other documents
furnished by, officers of the parties to this Agreement, the related Terms
Agreement, the related Sale and Servicing Agreement, the related Indenture, the
related Trust Agreement or any related Insurance Agreement. Such opinion may
assume the due authorization, execution and delivery of the instruments and
documents referred to therein by the parties thereto other than the Company.
Such opinion may be qualified, insofar as it concerns the enforceability of the
documents referred to therein, to the extent that such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights in general and by general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law). Such opinion may be further qualified as expressing no
opinion as to (x) the statements in the related Final Prospectus under the
heading "Certain Legal Aspects of the Loan Assets" except insofar as such
statements relate to the laws of the State of New York and the laws of the
United States, and (y) the statements in such Final Prospectus under the
headings "ERISA Considerations" and "Certain Federal Income Tax Consequences"
except insofar as such statements relate to the laws of the United States.
(c) Xxxxxx Xxxxxxxx, as General Counsel for the Company and the
Transferor, shall have furnished to the Underwriters an opinion, dated
the related Closing Date, to the effect that:
(i) Each of the Company and the Transferor have been duly
incorporated and each is validly existing as a corporation in
good standing in the jurisdiction of its organization with
corporate power to own its properties, to conduct its business as
described in the related Final Prospectus and to enter into and
perform its obligations under this Agreement, the related Terms
Agreement, the related Sale and Servicing Agreement, the related
Indenture, the related Trust Agreement, the related Insurance
Agreement and the Securities of the related Series, as
applicable;
(ii) The Company has full power and authority to deposit the
related Mortgage Loans as contemplated herein and in the related
Trust Agreement and the Servicer has full power and authority to
transfer and service the related Mortgage Loans as contemplated
in the related Sale and Servicing Agreement;
(iii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation by (a) the Company of the transactions contemplated
herein and in the related Sale and Servicing Agreement, Trust
Agreement and Indenture (b) by the Transferor of the transactions
contemplated in the related Sale and Servicing Agreement, except
such as may be required under the blue sky laws of any
jurisdiction and such other approvals as have been obtained;
(iv) Neither the issuance of the Securities of the related
Series nor delivery of the related Offered Securities, nor the
consummation of any other of the transactions contemplated in
this Agreement, the related Terms Agreement, the related Sale and
Servicing Agreement, the related Trust Agreement, the related
Indenture or the related Insurance Agreement, nor the fulfillment
of the terms of the related Securities, the related Sale and
Servicing Agreement, the related Indenture, the related Trust
Agreement, this Agreement, the related Terms Agreement or the
related Insurance Agreement, as applicable, will conflict with or
violate any term or provision of the articles of incorporation or
by-laws of the Company or the Transferor, as applicable or any
statute, order or regulation applicable to the Company of any
court, regulatory body, administrative agency or governmental
body having jurisdiction over the Company or the Transferor and
will not conflict with, result in a breach or violation or the
acceleration of or constitute a default under the terms of any
indenture or other agreement or instrument known to such counsel
to which the Company or the Transferor is a party or by which it
is bound; and
(v) There are no actions, proceedings or investigations
pending or, to the best knowledge of such counsel, threatened
before any court, administrative agency or other tribunal (i)
asserting the invalidity of this Agreement, the related Terms
Agreement, the related Sale and Servicing Agreement, the related
Trust Agreement, the related Indenture, the related Insurance
Agreement or the related Securities,(ii) seeking to prevent the
issuance of the Securities of the related Series or the
consummation by the Company or the Transferor, as applicable, of
any of the transactions contemplated by this Agreement, such
Terms Agreement, such Sale and Servicing Agreement, such
Indenture, such Trust Agreement or such Insurance Agreement, or
(iii) which might materially and adversely affect the performance
by the Company or the Transferor, as applicable, of its
obligations under, or the validity or enforceability of, this
Agreement, such Terms Agreement, such Sale and Servicing
Agreement, such Indenture, such Trust Agreement, such Insurance
Agreement or the related Securities. In rendering their opinion
such counsel may rely as to matters of fact, to the extent deemed
proper and as stated therein, on certificates of responsible
officers of the Company, the Transferor or public officials.
(d) The Underwriters shall have received from [ ], counsel for
the Underwriters, such opinion or opinions, dated the related Closing
Date, with respect to the issuance and sale of the Securities of the
related Series, the related Registration Statement, the related Final
Prospectus and such other related matters in form and substance that
is customary and reasonably acceptable to the Underwriters, and the
Company shall have furnished to such counsel such documents as the
Underwriters may reasonably request for the purpose of enabling them
to pass upon such matters.
(e) The Company shall have furnished to the Underwriters a
certificate of the Company, signed by the President or any Vice
President dated the related Closing Date, to the effect that the
signers of such certificate have carefully examined the related
Registration Statement (excluding any Current Reports and any other
documents incorporated by reference therein), the related Final
Prospectus, the Form 8-K relating to the Subsequent Mortgage Loans,
this Agreement and the related Terms Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on
and as of the related Closing Date with the same effect as if
made on such Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
(ii) no stop order suspending the effectiveness of such
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to their knowledge,
threatened; and
(iii) nothing has come to their attention that would lead
them to believe that such Registration Statement (excluding any
Current Report) contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, that
the related Final Prospectus (excluding the related Current
Report) contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or that
the Form 8-K relating to the Subsequent Mortgage Loans includes
any untrue statement of a material fact or omits to state any
information which the Final Prospectus states will be included in
such Form 8-K.
(f) Counsel for the Indenture Trustee shall have furnished to the
Underwriters an opinion, dated the related Closing Date, in form and
substance that is customary and reasonably acceptable to the
Underwriters regarding certain matters relating to the Indenture
Trustee.
(g) Counsel for the Owner Trustee shall have furnished to the
Underwriters an opinion, dated the related Closing Date, in form and
substance that is customary and reasonably acceptable to the
Underwriters regarding certain matters relating to the Owner Trustee.
In addition, such counsel shall furnish to the Underwriters such
opinions as to the treatment of the Trust Fund for purposes of state tax law
where the Owner Trustee maintains possession of the assets of the Trust Fund as
are customary and reasonably satisfactory to the Underwriters.
(h) KPMG Peat Marwick shall have furnished to the Underwriters
one or more letters in form and substance that is customary and
reasonably satisfactory to the Underwriters, to the effect that they
have performed certain specified procedures requested by the
Underwriters with respect to certain information relating to the
Offered Securities and certain matters relating to the Company.
(i) The Policy relating to the Offered Securities of the related
Series, if any, shall have been duly executed and issued prior to the
Closing Date, in form and substance that is customary and reasonably
satisfactory to the Underwriters, and shall conform in all respects to
the description thereof in the Prospectus.
(j) If applicable, counsel for the Insurer shall have furnished
to the Underwriters an opinion, dated the related Closing Date, in
form and substance that is customary and reasonably acceptable to the
Underwriters regarding to certain matters relating to the Insurer.
In rendering his opinion such counsel may rely as to matters of fact,
to the extent deemed proper and as stated therein, on certificates of
responsible officers of the Insurer or public officials.
(k) The Owner Trustee shall have received from the Depositor all
funds required to be delivered by the Depositor to be deposited in any
account required to be established in accordance with the related
Trust Agreement.
(l) The Offered Securities of the related Series shall have
received the ratings specified in the related Terms Agreement (the
"Required Ratings").
(m) On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (i) any intended or
possible downgrading or (ii) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
and originally requested by the Company relating to any previously
issued asset-backed securities of the Company by any "nationally
recognized statistical rating organization" (as such terms is defined
for purposes of the Exchange Act).
(n) On or prior to the Closing Date, there has been no
downgrading, not has any notice been given of (i) any intended or
possible downgrading or (ii) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
the Insurer's claims paying ability by any "nationally recognized
statistical rating organization" (as such terms is defined for
purposes of the Exchange Act).
(o) Subsequent to the date of the related Terms Agreement, there
shall not have been any change, or any development involving a
prospective change, in or affecting the business or properties of (i)
the Company, its parent company or any of its subsidiaries, (ii) the
Transferor or (iii) the Insurer which the Underwriters conclude in
their reasonable judgment, after consultation with the Company,
materially impairs the investment quality of the Offered Securities of
the related Series so as to make it impractical or inadvisable to
proceed with the public offering or the delivery of such Offered
Securities as contemplated by the related Final Prospectus.
(p) Prior to the related Closing Date, the Company shall have
furnished to the Underwriters such further information, certificates
and documents as the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects with respect to the particular Offered
Securities of a Series when and as provided in this Agreement and the related
Terms Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement and the related Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Underwriters and their counsel, this Agreement (with respect to the related
Offered Securities) and the related Terms Agreement and all obligations of the
Underwriters hereunder (with respect to the related Offered Securities) and
thereunder may be canceled at, or at any time prior to, the related Closing Date
by the Underwriters. Notice of such cancellation shall be given to the Company
in writing, or by telephone or telegraph confirmed in writing.
7. Indemnification and Contribution. (a) The Company and the
Transferor, jointly and severally, agree to indemnify and hold harmless each
Underwriter, each Underwriter's respective officers and directors and each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act, or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement relating to the Offered Securities of the applicable
Series as it became effective or in any amendment or supplement thereof, or in
such Registration Statement, in the related Preliminary Prospectus or the
related Final Prospectus, or in any amendment thereof, or in the Form 8-K
referred to in such Final Prospectus or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company and the Transferor will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein (A) in reliance upon and in conformity with written
information furnished to the Company as herein stated by or on behalf of any
Underwriter through you specifically for use in connection with the preparation
thereof or (B) in any Computational Materials or ABS Term Sheets furnished to
prospective investors by the Underwriters or any Current Report or any amendment
or supplement thereof, except to the extent that any untrue statement or alleged
untrue statement therein or omission therefrom results directly from an error (a
"Mortgage Pool Error") in the information concerning the characteristics of the
Mortgage Loans furnished by the Company to any Underwriter in writing or by
electronic transmission that was used in the preparation of either (x) any
Computational Materials or ABS Term Sheets (or amendments or supplements
thereof) included in such Current Report (or amendment or supplement thereof) or
(y) any written or electronic materials furnished to prospective investors on
which the Computational Materials (or amendments or supplements) were based.
(b) Each Underwriter agrees, severally, and not jointly, to indemnify
and hold harmless the Transferor and the Company, each of its directors, each of
its officers who signs the Registration Statement relating to the Offered
Securities of the applicable Series, and each person who controls the Transferor
or the Company within the meaning of the Act or the Exchange Act to the same
extent as the foregoing indemnities from the Company to each Underwriter, but
only with reference to (A) written information furnished to the Company by or on
behalf of such Underwriter through you specifically for use in the preparation
of the documents referred to in the foregoing indemnity with respect to the
related Series, or (B) any Computational Materials or ABS Term Sheets (or
amendments or supplements thereof) delivered to prospective investors by such
Underwriter, including any Computational Materials or ABS Term Sheets that are
furnished to the Company by such Underwriter pursuant to Section 8 and
incorporated by reference in such Registration Statement, the related
Preliminary Prospectus or the related Final Prospectus or any amendment or
supplement thereof (except that no such indemnity shall be available for any
losses, claims, damages or liabilities, or actions in respect thereof, resulting
from any Mortgage Pool Error, other than a Corrected Mortgage Pool Error);
provided, however, that in no event shall an Underwriter be liable to the
Transferor or Company under this paragraph (b) with respect to the material
described in clause (B) in an amount in excess of the fees received by such
Underwriter in connection with the offering of the related series of Offered
Securities.
(c) Promptly after receipt by an indemnified party under Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 7, notify such indemnifying party in writing of the commencement
thereof; but the omission so to notify such indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party or parties of the commencement
thereof, the indemnifying party or parties will be entitled to participate
therein, and to the extent that they may elect by written notice delivered to an
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both an indemnified party and an indemnifying party and such
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to an indemnifying party, such indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from an
indemnifying party or parties to such indemnified party of their election so to
assume the defense of such action and approval by such indemnified party of
counsel, such indemnifying party or parties will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) such indemnified party shall have employed separate counsel
in connection with the assertion of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party or parties shall not be liable for the expenses of more than
one separate counsel approved by the indemnified party or parties in the case of
subparagraph (a) or (b), representing the indemnified parties under subparagraph
(a) or (b), who are parties to such action), (ii) the indemnifying party or
parties shall not have employed counsel satisfactory to the indemnified party or
parties to represent such indemnified party or parties within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party or
parties have authorized the employment of counsel for an indemnified party at
the expense of the indemnifying parties; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii).
(d) If the indemnification provided for in paragraph (a) or (b) of
this Section 7 is due in accordance with its terms but is for any reason held by
a court to be unavailable from the Company, the Transferor or any Underwriter,
on grounds of policy or otherwise, or if an indemnified party failed to give
notice under paragraph (c) of this Section 7 in respect of a claim otherwise
subject to indemnification in accordance with paragraph (a) or (b) of this
Section 7, the Company, the Transferor and each Underwriter shall contribute to
the aggregate losses, claims, damages and liabilities (including legal and other
expenses reasonably incurred in connection with investigating or defending same)
to which the Company, the Transferor and such Underwriter may be subject in such
proportion so that such Underwriter is responsible for that portion represented
by the difference between the portion of the proceeds to the Company in respect
of the Offered Securities underwritten by such Underwriter for the related
Series and the portion of the total proceeds received by such Underwriter from
the sale of such Offered Securities (the "Underwriting Discount"), and the
Company and the Transferor are responsible for the balance; provided, however,
that in no case shall any such Underwriter be responsible under this
subparagraph for any amount in excess of such Underwriting Discount applicable
to the Offered Securities purchased by such Underwriter pursuant to this
Agreement and the related Terms Agreement. Notwithstanding anything to the
contrary in this Section 7(d), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the immediately preceding sentence of this
paragraph (d).
(e) If the indemnification provided for in paragraph (a) or (b) of
this Section 7 is due in accordance with its terms but is for any reason held by
a court to be unavailable from the Company, the Transferor or any Underwriter,
on grounds of policy or otherwise, or if an indemnified party failed to give
notice under paragraph (c) of this Section 7 in respect of a claim otherwise
subject to indemnification in accordance with paragraph (a) or (b) of this
Section 7, the Company, the Transferor and each Underwriter shall contribute to
the aggregate losses, claims, damages and liabilities (including legal and other
expenses reasonably incurred in connection with investigating or defending same)
to which the Company, the Transferor and such Underwriter may be subject in such
proportion so that such Underwriter is responsible for that portion represented
by the difference between the portion of the proceeds to the Company in respect
of the Offered Securities underwritten by such Underwriter for the related
Series and the portion of the total proceeds received by such Underwriter from
the sale of such Offered Securities (the "Underwriting Discount"), and the
Company and the Transferor are responsible for the balance; provided, however,
that in no case shall any such Underwriter be responsible under this
subparagraph for any amount in excess of such Underwriting Discount applicable
to the Offered Securities purchased by such Underwriter pursuant to this
Agreement and the related Terms Agreement. Notwithstanding anything to the
contrary in this Section 7(e), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the immediately preceding sentence of this
paragraph (e).
8. Computational Materials and Structural Term Sheets. (a) In
accordance with Section 10, the Underwriters shall deliver to the Company one
complete copy of all materials provided by the Underwriters to prospective
investors in such Offered Securities which constitute (i) "Computational
Materials" within the meaning of the no-action letter dated May 20, 1994 issued
by the Division of Corporation Finance of the Commission to Xxxxxx, Xxxxxxx
Acceptance Corporation I, Xxxxxx, Peabody & Co. Incorporated, and Xxxxxx
Structured Asset Corporation and the no-action letter dated May 27, 1994 issued
by the Division of Corporation Finance of the Commission to the Public
Securities Association (together, the "Xxxxxx Letters") and the filing of such
material is a condition of the relief granted in such letter (such materials
being the "Computational Materials"), and (ii) "Structural Term Sheets" within
the meaning of the no-action letter dated February 17, 1995 issued by the
Division of Corporation Finance of the Commission to the Public Securities
Association (the "PSA Letter") and the filing of such material is a condition of
the relief granted in such letter (such materials being the "Structural Term
Sheets"). Each delivery of Computational Materials and Structural Term Sheets to
the Company pursuant to this paragraph (a) shall be effected in accordance with
Section 10.
(b) Each Underwriter represents and warrants to and agrees with the
Company, as of the date of the related Terms Agreement and as of the Closing
Date, that:
(i) the Computational Materials furnished to the Company by such
Underwriter pursuant to Section 8(a) constitute (either in original,
aggregated or consolidated form) all of the materials furnished to
prospective investors by such Underwriter prior to the time of
delivery thereof to the Company that are required to be filed with the
Commission with respect to the related Offered Securities in
accordance with the Xxxxxx Letters, and such Computational Materials
comply with the requirements of the Xxxxxx Letters;
(ii) the Structural Term Sheets furnished to the Company by such
Underwriter pursuant to Section 8(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to the
time of delivery thereof to the Company that are required to be filed
with the Commission as "Structural Term Sheets" with respect to the
related Offered Securities in accordance with the PSA Letter, and such
Structural Term Sheets comply with the requirements of the PSA Letter;
and
(iii) on the date any such Computational Materials or Structural
Term Sheets with respect to such Offered Securities (or any written or
electronic materials furnished to prospective investors on which the
Computational Materials are based) were last furnished to each
prospective investor by such Underwriter and on the date of delivery
thereof to the Company pursuant to Section 8(a) and on the related
Closing Date, such Computational Materials (or such other materials)
or Structural Term Sheets did not and will not include any untrue
statement of a material fact or, when read in conjunction with the
Final Prospectus and Prospectus Supplement, omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
Notwithstanding the foregoing, each Underwriter makes no
representation or warranty as to whether any Computational Materials or
Structural Term Sheets (or any written or electronic materials on which the
Computational Materials are based) included or will include any untrue statement
resulting directly from any Mortgage Pool Error.
(c) If, at any time when a prospectus relating to the Offered
Securities of a Series is required to be delivered under the Act, it shall be
necessary to amend or supplement the related Final Prospectus as a result of an
untrue statement of a material fact contained in any Computational Materials or
Structural Term Sheets provided by any Underwriter pursuant to this Section 8 or
the omission to state therein a material fact required, when considered in
conjunction with the related Final Prospectus and Prospectus Supplement, to be
stated therein or necessary to make the statements therein, when read in
conjunction with the related Final Prospectus and Prospectus Supplement, not
misleading, or if it shall be necessary to amend or supplement any Current
Report relating to any Computational Materials or Structural Term Sheets to
comply with the Act or the rules thereunder, such Underwriter promptly will
prepare and furnish to the Company for filing with the Commission an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Each Underwriter represents and warrants to
the Company, as of the date of delivery by it of such amendment or supplement to
the Company, that such amendment or supplement will not include any untrue
statement of a material fact or, when read in conjunction with the related Final
Prospectus and Prospectus Supplement, omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, each such Underwriter makes no representation or warranty as
to whether any such amendment or supplement will include any untrue statement
resulting directly from any Mortgage Pool Error.
9. Collateral Term Sheets. (a) Prior to the delivery of any
"Collateral Term Sheet" within the meaning of the PSA Letter, the filing of
which material is a condition of the relief granted in such letter (such
material being the "Collateral Term Sheets"), to a prospective investor in the
Offered Securities, the Underwriters shall notify the Company and its counsel by
telephone of their intention to deliver such materials and the approximate date
on which the first such delivery of such materials is expected to occur. Not
later than 10:30 a.m., New York time, on the business day immediately following
the date on which any Collateral Term Sheet was first delivered to a prospective
investor in the Offered Securities, the Underwriters shall deliver to the
Company one complete copy of all materials provided by the Underwriters to
prospective investors in such Offered Securities which constitute "Collateral
Term Sheets." Each delivery of a Collateral Term Sheet to the Company pursuant
to this paragraph (a) shall be effected in accordance with Section 10.
(Collateral Term Sheets and Structural Term Sheets are, together, referred to
herein as "ABS Term Sheets.") At the time of each such delivery, the Underwriter
making such delivery shall indicate in writing that the materials being
delivered constitute Collateral Term Sheets, and, if there has been any prior
such delivery with respect to the related Series, shall indicate whether such
materials differ in any material respect from any Collateral Term Sheets
previously delivered to the Company with respect to such Series pursuant to this
Section 9(a) as a result of the occurrence of a material change in the
characteristics of the related Mortgage Loans.
(b) Each Underwriter represents and warrants to and agrees with the
Company as of the date of the related Terms Agreement and as of the Closing
Date, that:
(i) The Collateral Term Sheets furnished to the Company by such
Underwriter pursuant to Section 9(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to time
of delivery thereof to the Company that are required to be filed with
the Commission as "Collateral Term Sheets" with respect to the related
Offered Securities in accordance with the PSA Letter, and such
Collateral Term Sheets comply with the requirements of the PSA Letter;
and
(ii) On the date any such Collateral Term Sheets with respect to
such Offered Securities were last furnished to each prospective
investor by such Underwriter and on the date of delivery thereof to
the Company pursuant to Section 9(a) and on the related Closing Date,
such Collateral Term Sheets did not and will not include any untrue
statement of a material fact or, when read in conjunction with the
Final Prospectus and Prospectus Supplement, omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
Notwithstanding the foregoing, each Underwriter makes no
representation or warranty as to whether any Collateral Term Sheet included or
will include any untrue statement or material omission resulting directly from
any Mortgage Pool Error.
(c) If, at any time when a prospectus relating to the Offered
Securities of a Series is required to be delivered under the Act, it shall be
necessary to amend or supplement the related Final Prospectus as a result of an
untrue statement of a material fact contained in any Collateral Term Sheets
provided by any Underwriter pursuant to this Section 9 or the omission to state
therein a material fact required, when considered in conjunction with the
related Final Prospectus and Prospectus Supplement, to be stated therein or
necessary to make the statements therein, when read in conjunction with the
related Final Prospectus and Prospectus Supplement, not misleading, or if it
shall be necessary to amend or supplement any Current Report relating to any
Collateral Term Sheets to comply with the Act or the rules thereunder, such
Underwriter promptly will prepare and furnish to the Company for filing with the
Commission an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Each Underwriter
represents and warrants to the Company, as of the date of delivery of such
amendment or supplement to the Company, that such amendment or supplement will
not include any untrue statement of a material fact or, when read in conjunction
with the related Final Prospectus and Prospectus Supplement, omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, each such Underwriter makes no
representation or warranty as to whether any such amendment or supplement will
include any untrue statement resulting directly from any Mortgage Pool Error.
10. Delivery and Filing of Current Reports, Collateral Term Sheets,
Structural Term Sheets.
(a) Any Current Report, Collateral Term Sheet or Structural Term
Sheet that is required to be delivered by the Underwriter to the
Company hereunder shall be effected by the delivery of four copies to
counsel for the Company and one copy in computer readable format to
the Financial Printer on or prior to 10:30 a.m. on the date so
specified herein.
(b) The Company shall cause the Financial Printer to file with
the Commission any such Current Report, Collateral Term Sheet or
Structural Term Sheet within one business day immediately following
the delivery thereof pursuant to the preceding subsection. The Company
shall use its best efforts to cause any such Current Report,
Collateral Term Sheet or Structural Term Sheet to be so filed prior to
2:00 p.m., New York time, on such business day and will promptly
advise the Underwriters of such filing.
11. Termination. This Agreement (with respect to a particular
Certificate Offering) and the related Terms Agreement shall be subject to
termination in the absolute discretion of the Underwriters, by notice given to
the Company prior to delivery of and payment for the related Offered Securities,
if prior to the related Closing Date (i) trading in securities generally on the
New York Stock Exchange shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York shall have been
declared by either federal or New York State authorities, or (iii) there shall
have occurred any outbreak or material escalation 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 the reasonable judgment of the Underwriters,
impracticable to market such Offered Securities.
12. Representations and Indemnities to Survive Delivery. The
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement and the related Terms Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Underwriters
or the Company or any of the officers, directors of controlling persons referred
to in Section 7 hereof, and will survive delivery of and payment for the related
Offered Securities. The provisions of Section 7 hereof shall survive the
termination or cancellation of this Agreement and the related Terms Agreement.
13. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail on the Closing Date to purchase the Offered Securities
which it or they are obligated to purchase hereunder and under the applicable
Terms Agreement (the "Defaulted Securities"), you shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth and under the applicable Terms Agreement. If, however,
you have not completed such arrangements within such 24-hour period, then:
(a) if the aggregate original Certificate Principal Balance of
Defaulted Securities does not exceed 10% of the aggregate original
Certificate Principal Balance of the Offered Securities to be
purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters named in such Terms Agreement shall be obligated to
purchase the full amount thereof in the proportions that their
respective underwriting obligations thereunder bear to the
underwriting obligations of all non-defaulting Underwriters; and
(b) if the aggregate original Certificate Principal Balance of
Defaulted Securities exceeds 10% of the aggregate original Certificate
Principal Balance of the Offered Securities to be purchased pursuant
to such Terms Agreement, the applicable Terms Agreement shall
terminate without any liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 13 and nothing in this
Agreement shall relieve any defaulting Underwriter from liability in respect of
its default.
In the event of any such default which does not result in a
termination of this Agreement or such applicable Terms Agreement, either you or
the Company shall have the right to postpone the Closing Date for a period of
time not exceeding seven days in order to effect any required changes in the
Registration Statement or in any other documents or arrangements.
14. Successors. This Agreement and the related Terms Agreement will
inure to the benefit of and be binding upon the parties hereto and thereto and
their respective successors and the officers, directors and controlling persons
referred to in Section 7 hereof, and their successors and assigns, and no other
person will have any right or obligation hereunder or thereunder. No purchaser
of any Offered Certificate from the Underwriters shall be deemed a successor or
assign by reason of such purchase.
15. APPLICABLE LAW. THIS AGREEMENT AND THE RELATED TERMS AGREEMENT
WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
16. Miscellaneous. This Agreement, as supplemented by the related
Terms Agreement, supersedes all prior and contemporaneous agreements and
understandings relating to the subject matter hereof. This Agreement and the
related Terms Agreement or any term of each may not be changed, waived,
discharged or terminated except by an affirmative written agreement made by the
party against whom enforcement of the change, waiver, discharge or termination
is sought. The headings in this Agreement and the related Terms Agreement are
for purposes of reference only and shall not limit or otherwise affect the
meaning hereof or thereof.
17. Notices. All communications by one party hereunder to all other
parties hereunder will be in writing and effective only on receipt by such other
parties, and will be delivered as follows: (A) to the Underwriters at the
addresses first above written; (B) to the Company at 0000 Xxxxxxxxx Xxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxxx; and (C) to the
Transferor at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxx X. Xxxxxxxxx.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Underwriters.
Very truly yours,
PREFERRED SECURITIZATION CORPORATION
By:..___________________________________
Xxxx X. Xxxxxxxxx
President
PREFERRED CREDIT CORPORATION
By: ___________________________________
Xxxx X. Xxxxxxxxx
Chief Executive Officer
ACKNOWLEDGED BY:
[------------------------------------]
By: ___________________________________
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
[NAME OF UNDERWRITER(S)]
By: _______________________________
Name: _____________________________
Title: _____________________________
EXHIBIT A
PREFERRED CREDIT OWNER TRUST 199_-_
ASSET-BACKED SECURITIES
TERMS AGREEMENT
(to Underwriting Agreement,
dated ______________, 199__
among the Company, the Transferor and the Underwriters)
Preferred Securitization Corporation [DATE]
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Preferred Credit Corporation
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Each of ____________________ ("____________________") and
_____________________ ("__________________," each an "Underwriter" and
collectively the "Underwriters") agrees, severally and not jointly, subject to
the terms and provisions herein and of the captioned Underwriting Agreement (the
"Underwriting Agreement"), to purchase such Classes of Series ____-__ Securities
specified opposite its name in Section 2(a) hereof (the "Offered Securities").
This letter supplements and modifies the Underwriting Agreement solely as it
relates to the purchase and sale of the Offered Securities described below. The
Series ____- __ Securities are registered with the Securities and Exchange
Commission by means of an effective Registration Statement (No. _____).
Capitalized terms used and not defined herein have the meanings given them in
the Underwriting Agreement.
Section 1. The Mortgage Pool: The Series _____-__ Securities shall
evidence the entire beneficial ownership interest in a pool (the "Mortgage Loan
Pool") of loans (the "Mortgage Loans") having the characteristics described in
the Prospectus Supplement dated the date hereof.
Section 2. The Securities: The Offered Securities shall be issued as
follows:
(a) Classes: The Offered Securities shall be issued with the following
Class designations, interest rates and principal balances, subject in the
aggregate to the variance referred to in the Final Prospectus:
Principal Interest Class Purchase
Class Balance Rate Price Percentage
Each of the Underwriters agrees, severally and not jointly, subject to
the terms and provisions herein and of the captioned Underwriting Agreement, to
purchase the principal balances of the Classes of Series ____-__ Securities
specified opposite its name below.
Class UNDERWRITER #1 UNDERWRITER #2
(b) The Offered Securities shall have such other characteristics as
described in the related Final Prospectus.
Section 3. Purchase Price: The Purchase Price for each Class of the
Offered Securities shall be the Class Purchase Price Percentage therefor (as set
forth in Section 2(a) above) of the initial Class Principal Balance thereof plus
accrued interest at the applicable interest rate per annum of each such Class
from and including the Cut-off Date up to, but not including, _____________ (the
"Closing Date").
Section 4. Required Ratings: The Offered Securities shall have
received Required Ratings of at least [ ] from [ ].
Section 5. Insurer:
Section 6. Location of Closing:
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Underwriters and the Company.
Very truly yours,
[UNDERWRITER]
as Representative of the several
Underwriters
By: _________________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
PREFERRED CREDIT CORPORATION
By: __________________________
Name:
Title:
PREFERRED SECURITIZATION CORPORATION
By: __________________________
Name:
Title:
ACKNOWLEDGED BY:
By: __________________________
Name:
Title:
