EXHIBIT 1.1
ASSET BACKED FUNDING CORPORATION
$468,270,000
(Approximate)
Asset-Backed Certificates,
Series 2006-FFH1
February 24, 2006
UNDERWRITING AGREEMENT
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Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1. Introductory. Asset Backed Funding Corporation, a Delaware
corporation (the "Company"), proposes to sell to Banc of America Securities LLC
("BAS" or the "Underwriter") $468,270,000 aggregate Certificate Principal
Balance of its Asset-Backed Certificates identified in Schedule I hereto (the
"Offered Certificates") having the aggregate initial Certificate Principal
Balances set forth in Schedule I (subject to an upward or downward variance, not
to exceed 5%, of the precise initial Certificate Principal Balance within such
range to be determined by the Company in its sole discretion). The Offered
Certificates, together with the Class CE, Class P and Class R (the "Non-Offered
Certificates") are collectively refereed to herein as the "Certificates" and
evidence the entire ownership interest in the assets of a trust estate (the
"Trust Estate") consisting primarily of a pool of fixed and variable interest
rate mortgage loans having original terms to maturity of approximately 177 to
approximately 360 months as described in Schedule I (the "Mortgage Loans") to be
acquired by the Company pursuant to a mortgage loan purchase agreement (the
"Mortgage Loan Purchase Agreement"), dated February 28, 2006 by and between the
Company, as purchaser and Bank of America, National Association, as seller. As
of the close of business on the date specified in Schedule I as the cut-off date
(the "Cut-off Date"), the Mortgage Loans will have the aggregate principal
balance set forth in Schedule I. This Underwriting Agreement shall hereinafter
be referred to as the "Agreement." Elections will be made to treat the assets of
the Trust Estate (exclusive of the arrangements intended to protect against
basis risk for certain of the Certificates, the Cap Carryover Reserve Account,
the Supplemental Interest Trust, the Interest Rate Swap Agreement and the Swap
Account) as multiple separate real estate mortgage investment conduits (each, a
"REMIC"). The Certificates are to be issued pursuant to a pooling and servicing
agreement, dated February 1, 2006 (the "Pooling and Servicing Agreement"), among
the Company, as depositor, National City Home Loan Services, Inc., as servicer
(the "Servicer") and ▇▇▇▇▇ Fargo Bank, N.A., as trustee (the "Trustee"). The
Offered Certificates will be issued in the denominations specified in Schedule
I. The Pooling and Servicing Agreement, this Agreement, and the Mortgage Loan
Purchase Agreement are collectively referred to herein as the "Basic Documents."
Capitalized terms used herein that are not otherwise defined herein
have the meanings assigned thereto in the Pooling and Servicing Agreement.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the Underwriter as follows:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act") and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (the file number of which is set
forth in Schedule I hereto), which has become effective, for the
registration under the Act of the Offered Certificates. Such
registration statement, as amended to the date of this Agreement, meets
the requirements set forth in Rule 415(a)(l) under the Act and complies
in all other material respects with Rule 415(a)(1). The Company
proposes to file with the Commission pursuant to Rule 424 under the Act
a supplement to the form of prospectus included in such registration
statement relating to the Offered Certificates and the plan of
distribution thereof and a revised form of prospectus (the "Revised
Basic Prospectus") with such changes to the form of prospectus which
appears in the Registration Statement as are necessary to comply with
the requirements of Regulation AB under the Act (17 C.F.R. Subpart 229,
Items 1100-1123) and has previously advised you of all further
information (financial and other) with respect to the Company to be set
forth therein. Such registration statement, including the exhibits
thereto, as amended to the date of this Agreement, is hereinafter
called the "Registration Statement"; such prospectus in the form in
which it appears in the Registration Statement, as revised by the
Revised Basic Prospectus, is hereinafter called the "Basic Prospectus";
and such supplement to the Basic Prospectus, in the form in which it
shall be filed with the Commission pursuant to Rule 424, is hereinafter
called the "Prospectus Supplement" and, collectively with the Basic
Prospectus, the "Final Prospectus." Any reference herein to the
Registration Statement, the Basic Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the date of this Agreement, or the issue date of
the Basic Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus or the
Final Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this Agreement,
or the issue date of the Basic Prospectus or the Final Prospectus, as
the case may be, and deemed to be incorporated therein by reference.
(b) At or prior to the time when sales to investors of the
Securities were first made, as set forth in Schedule I hereto (the
"Pricing Date"), the Company had prepared the information
(collectively, the "Disclosure Package") listed in Schedule III hereto.
If, subsequent to the date of this Agreement, the Company or the
Underwriter has determined that such information included an untrue
statement of material fact or omitted 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 and have
terminated their old purchase contracts and entered into new purchase
contracts with purchasers of the Securities, then "Disclosure Package"
will refer to the information available to purchasers at the time of
entry into the first such new purchase contract, including any
information that corrects such material misstatements or omissions
("Corrective Information").
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(c) As of the date hereof, when the Final Prospectus is first
filed pursuant to Rule 424 under the Act, when, prior to the Closing
Date (as hereinafter defined), any amendment to the Registration
Statement becomes effective (including the filing of any document
incorporated by reference in the Registration Statement), when any
supplement to the Final Prospectus is filed with the Commission and at
the Closing Date, (i) the Registration Statement, as amended as of any
such time, and the Final Prospectus, as amended or supplemented as of
any such time, will comply in all material respects with the Act and
the respective rules thereunder, (ii) the Registration Statement, as
amended as of any such time, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, and (iii) the Final Prospectus, as amended or supplemented
as of any such time, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Final Prospectus or any amendment thereof
or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Underwriter specifically for use in connection with the preparation of
the Registration Statement or the Final Prospectus.
(d) The Disclosure Package, at the Pricing Date did not, and
at the Closing 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 that the Company makes
no representation and warranty with respect to the information
contained in or omitted from the Disclosure Package or any amendment
thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Underwriter specifically for use in connection with the preparation of
the Disclosure Package.
(e) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Delaware and
has corporate and other power and authority to own its properties and
conduct its business, as now conducted by it, and to enter into and
perform its obligations under this Agreement and the other Basic
Documents to which it is a party.
(f) The Company is not aware of (i) any request by the
Commission for any further amendment of the Registration Statement or
the Basic Prospectus or for any additional information or (ii) 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 by the Commission.
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(g) This Agreement has been duly authorized, executed and
delivered by the Company, and each of the other Basic Documents to
which the Company is a party, when delivered by the Company, will have
been duly authorized, executed and delivered by the Company, and will
constitute a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject,
as to the enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium, receivership and similar laws
affecting creditors' rights generally and to general principles of
equity (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law), and except as rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws or principles of public policy.
(h) The Company is not, and on the date on which the first
bona fide offer of the Offered Certificates is made will not be, an
"ineligible issuer," as defined in Rule 405 under the Act.
(i) On the Closing Date, the Basic Documents will conform to
the description thereof contained in the Registration Statement, the
Final Prospectus and the Disclosure Package; the Securities will have
been duly and validly authorized and, when such Securities are duly and
validly executed, issued and delivered in accordance with the Pooling
and Servicing Agreement, and sold to the Underwriter as provided
herein, will be validly issued and outstanding and entitled to the
benefits of the Pooling and Servicing Agreement.
(j) As of the Closing Date, the representations and warranties
of the Company set forth in the Pooling and Servicing Agreement will be
true and correct.
(k) Neither the execution and delivery by the Company of this
Agreement or any other of the Basic Documents nor the consummation by
the Company of the transactions contemplated herein or therein, nor the
issuance of the Securities or the public offering thereof as
contemplated in the Final Prospectus or the Disclosure Package will
conflict in any material respect with or result in a material breach
of, or constitute a material default (with notice or passage of time or
both) under, or result in the imposition of any lien, pledge, charge,
of the property or assets of the Company (except as required or
permitted pursuant thereto or hereto), pursuant to any material
mortgage, indenture, loan agreement, contract or other instrument to
which the Company is party or by which it is bound, nor will such
action result in any violation of any provisions of any applicable law,
administrative regulation or administrative or court decree, the
certificate of incorporation or by-laws of the Company. The Company is
not in violation of its certificate of incorporation, in default in any
material respect in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease, trust agreement,
transfer and servicing agreement or other instrument to which a party
or by which it may be bound, or to which any material portion of its
property or assets is subject.
(l) No legal or governmental proceedings are pending to which
the Company is a party or of which any property of the Company is
subject, which if determined adversely to the Company would,
individually or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of
the Company; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
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(m) Since the date of which information is given in the
Registration Statement, there has not been any material adverse change
in the business or net worth of the Company.
(n) Any taxes, fees and other governmental charges in
connection with the execution and delivery of the Basic Documents and
the execution, delivery and sale of the Securities have been or will be
paid at or prior to the Closing Date.
(o) No consent, approval, authorization or order of, or
registration, filing or declaration with, any court or governmental
agency or body is required, or will be required, in connection with (i)
the execution and delivery by the Company of any Basic Document or the
performance by the Company of any or (ii) the offer, sale or delivery
of the Securities except such as shall have been obtained or made, as
the case may be, or will be obtained or made, as the case may be, prior
to the Closing Date, or will not materially adversely affect the
ability of the Company to perform its obligations under any Basic
Document.
(p) The Company possesses, and will possess, 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 conducted by it and as described
in the Preliminary Prospectus, if any, Final Prospectus and the
Disclosure Package, except to the extent that the failure to have such
licenses, certificates, authorities or permits does not have a material
adverse effect on the Securities or the financial condition of the
Company, and the Company has not received, nor will have received as of
each Closing Date, any 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 its business, operations or financial condition.
(q) On the Closing Date, (i) the Company will have good and
marketable title to the related Mortgage Loans being transferred by it
to the Trust pursuant thereto, free and clear of any lien, (ii) the
Company will not have assigned to any person any of its right, title or
interest in such Mortgage Loans or in the Pooling and Servicing
Agreement, and (iii) the Company will have the power and authority to
sell such Mortgage Loans to the Trust, and upon execution and delivery
of the Pooling and Servicing Agreement by the Trustee, the Company and
the Servicer, the Trust will have good and marketable title thereto, in
each case free of liens.
(r) The properties and businesses of the Company conform, and
will conform, in all material respects, to the descriptions thereof
contained in the Final Prospectus and the Disclosure Package.
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(s) The Company is not, and, after giving effect to the
transactions contemplated by the Pooling and Servicing Agreement and
the offering and sale of the Securities, neither the Company nor the
Trust Fund will be, an "investment company", as defined in the
Investment Company Act of 1940, as amended.
(t) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement
to qualify the Pooling and Servicing Agreement under the Trust
Indenture Act of 1939, as amended (the "1939 Act").
(u) Other than the Final Prospectus, the Company (including
its agents and representatives other than the Underwriter) has not
made, used, prepared, authorized, approved or referred to and will not
make, use, prepare, authorize, approve or refer to any "written
communication" (as defined in Rule 405 under the Act) that constitutes
an offer to sell or solicitation of an offer to buy the Securities
other than (i) information included in the Disclosure Package (ii) any
document not constituting a prospectus pursuant to Section 2(a)(10)(a)
of the Act or Rule 134 under the Act or (iii) other written
communication approved in writing in advance by the Underwriter.
(v) Any Issuer Free Writing Prospectus included in the
Disclosure Package complied in all material respects with the Act and
has been, or will be filed in accordance with Rule 433 under the Act
(to the extent required thereby).
SECTION 3. Purchase, Sale and Delivery of the Offered Certificates. On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, the aggregate Certificate Principal Balance of the Offered
Certificates set forth in Schedule II hereto, at the applicable purchase price
set forth in Schedule I hereto.
The Company will deliver the Offered Certificates to the Underwriter,
against payment of the applicable purchase price therefor in same day funds
wired to such bank as may be designated by the Company, or by such other manner
of payment as may be agreed upon by the Company and the Underwriter, at the
offices of Hunton & ▇▇▇▇▇▇▇▇ LLP, Charlotte, North Carolina, at 10:00 A.M.,
Eastern time, on February 28, 2006, or at such other place or time not later
than seven full business days thereafter as the Underwriter and the Company
determine, such time being referred to herein as the "Closing Date."
The Offered Certificates so to be delivered will be in such
denominations and registered in such names as the Underwriter requests two full
business days prior to the Closing Date and will be made available at the
offices of Banc of America Securities LLC, Charlotte, North Carolina or, upon
the Underwriter's request, through the facilities of The Depository Trust
Company.
SECTION 4. Offering by the Underwriter. It is understood that the
Underwriter proposes to offer the Offered Certificates subject to this Agreement
for sale to the public (which may include selected dealers) on the terms as set
forth in the Final Prospectus.
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SECTION 5. Covenants of the Company. The Company hereby covenants and
agrees with the Underwriter that:
(a) Prior to the termination of the offering of the Offered
Certificates, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus)
to the Basic Prospectus unless the Company has furnished the
Underwriter a copy for their review prior to filing and will not file
any such proposed amendment or supplement to which the Underwriter
reasonably objects. Subject to the foregoing sentence, the Company will
cause the Final Prospectus to be filed with the Commission pursuant to
Rule 424. The Company will advise the Underwriter promptly (i) when the
Final Prospectus shall have been filed with the Commission pursuant to
Rule 424, (ii) when any amendment to the Registration Statement
relating to the Offered Certificates shall have become effective, (iii)
of any request by the Commission for any amendment of the Registration
Statement or amendment of or supplement to the Final Prospectus or for
any additional information, (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Offered
Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. 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) If, at any time when a prospectus relating to the Offered
Certificates is required to be delivered under the Act, any event
occurs as a result of which the 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 to amend or supplement the
Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will prepare and file
with the Commission, subject to the first sentence of 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
and will use its best efforts to cause any required post-effective
amendment to the Registration Statement containing such amendment to be
made effective as soon as possible.
(c) The Company will furnish to the Underwriter and counsel
for the Underwriter, without charge, executed copies of the
Registration Statement (including exhibits thereto) and each amendment
thereto which shall become effective on or prior to the Closing Date
and, so long as delivery of a prospectus by the Underwriter or dealers
may be required by the Act, as many copies of the Final Prospectus and
any amendments thereof and supplements thereto as the Underwriter may
reasonably request. The Company will pay the expenses of printing all
documents relating to the initial offering, provided that any
additional expenses incurred in connection with the requirement of
delivery of a market-making prospectus, if applicable, will be borne by
the Underwriter.
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(d) The Company will furnish such information as may be
required and otherwise cooperate in qualifying the Offered Certificates
for sale under the laws of such jurisdictions as the Underwriter may
reasonably designate and to maintain such qualifications in effect so
long as required for the distribution of the Offered Certificates;
provided, however, that the Company shall not be required to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general or unlimited service
of process in any jurisdiction where it is not now so subject.
SECTION 6. Conditions to the Obligations of the Underwriter. The
obligations of the Underwriter to purchase the Offered Certificates shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement filed prior to the
Closing Date (including the filing of any document incorporated by reference
therein) and as of the Closing Date, to the accuracy of the statements of the
Company made in any certificates delivered pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Underwriter shall have received from Deloitte & Touche
LLP (i) a letter, dated the date hereof, confirming that they are
independent public accountants within the meaning of the Act and the
rules and regulations of the Commission promulgated thereunder and
otherwise in form and substance reasonably satisfactory to the
Underwriter and counsel to the Underwriter and (ii) if requested by the
Underwriter, a letter dated the Closing Date, updating the letter
referred to in clause (i) above, in form and substance reasonably
satisfactory to the Underwriter and counsel for the Underwriter.
(b) All actions required to be taken and all filings required
to be made by the Company under the Act prior to the sale of the
Offered Certificates shall have been duly taken and made. At and prior
to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted, or to the knowledge of the
Company or the Underwriter, shall have been contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Company or the Servicer
which, in the reasonable judgment of the Underwriter, materially
impairs the investment quality of the Offered Certificates; (ii) any
downgrading in the ratings of the securities of the Servicer by any
"nationally recognized statistical rating organization" (as such term
is defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or
review its ratings of any securities of the Servicer (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange; (iv) any banking moratorium declared by federal, North
Carolina or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the reasonable judgment of
the Underwriter, the effects of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the sale of and payment for the Offered
Certificates.
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(d) The Underwriter shall have received a certificate dated
the Closing Date of an executive officer of the Company in which such
officer shall state that, to the best of such officer's knowledge after
reasonable inspection, (i) the representations and warranties of the
Company contained in the Basic Documents are true and correct with the
same force and effect as if made on the Closing Date and (ii) the
Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the
Closing Date.
(e) The Underwriter shall have received an opinion of
reasonably acceptable counsel to the Servicer and the Trustee, dated
the Closing Date, in form and substance satisfactory to the Underwriter
and counsel for the Underwriter.
(f) The Underwriter shall have received an opinion of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, special counsel to the Company and Bank of America,
National Association, dated the Closing Date, in form and substance
satisfactory to the Underwriter and counsel for the Underwriter.
(g) The Underwriter shall have received copies of any opinions
of counsel for the Company that the Company is required to deliver to
any Rating Agency. Any such opinions shall be dated the Closing Date
and addressed to the Underwriter or accompanied by reliance letters
addressed to the Underwriter.
(h) The Underwriter shall have received from Hunton & ▇▇▇▇▇▇▇▇
LLP, special counsel to the Underwriter, a letter addressed to the
Underwriter dated the Closing Date with respect to the Final
Prospectus, substantially to the effect that no facts have come to such
counsel's attention in the course of its review of the Final Prospectus
which causes it to believe that the Final Prospectus, as of the date of
the Prospectus Supplement or the Closing Date, 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, in the light of the circumstances under which they were made,
not misleading; it being understood that such counsel need not express
any view as to any information incorporated by reference in the Final
Prospectus or as to the adequacy or accuracy of the financial,
numerical, statistical or quantitative information included in the
Final Prospectus.
(i) On or before the Closing Date, the Underwriter shall have
received evidence satisfactory to it that each class of Offered
Certificates has been given the ratings set forth on Schedule I hereto.
(j) At the Closing Date, the Certificates and the Pooling and
Servicing Agreement will conform in all material respects to the
descriptions thereof contained in the Final Prospectus.
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(k) The Underwriter shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Registration
Statement or the Final Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact or omits to state a fact
which, in the opinion of counsel to the Underwriter, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(l) All corporate proceedings and other legal matters relating
to the authorization, form and validity of this Agreement, the Pooling
and Servicing Agreement, the Mortgage Loan Purchase Agreement, the
Certificates, the Registration Statement and the Final Prospectus, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby, shall be reasonably satisfactory in all respects
to counsel for the Underwriter, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(m) The Underwriter shall have received a certificate (upon
which ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP shall be entitled to rely in rendering its
opinions and letters under the Basic Documents) dated the Closing Date
of an officer of the Trustee in which such officer shall state that, to
the best of such officer's knowledge after reasonable investigation:
(i) the Trustee is not an affiliate of any other entity listed as a
transaction party in the Prospectus Supplement (ii) the information in
the Prospectus Supplement related to the Trustee (the "Trustee
Disclosure") includes (a) the Trustee's correct name and form of
organization and (b) a discussion of the Trustee's experience serving
as trustee for asset-backed securities transactions involving mortgage
loans; and (iii) the Trustee Disclosure is true and correct in all
material respects and nothing has come to his or her attention that
that would lead such officer to believe that the Trustee Disclosure
contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements therein not misleading.
(n) The Underwriter shall have received a certificate (upon
which ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP shall be entitled to rely in rendering its
opinions and letters under the Basic Documents) dated the Closing Date
of an officer of First Franklin Financial Corporation (the
"Originator") in which such officer shall state that, to the best of
such officer's knowledge after reasonable investigation: (i) except as
disclosed, the Originator is not an affiliate of any other entity
listed as a transaction party in the Prospectus Supplement; (ii) the
information in the Prospectus Supplement related to the Originator (the
"Originator Disclosure") includes the Originator's correct name, form
of organization and length of time originating mortgage loans; (iii)
the description of the Originator's origination program includes (a)
experience in originating mortgage loans, (b) size and composition of
the Originator's origination portfolio, and (c) the Originator's
credit-granting or underwriting criteria for the mortgage loans; (iv)
except as set forth in the Originator Disclosure, no additional
information regarding the Originator's origination program could have a
material adverse affect in the performance of the pool assets or the
Offered Certificates; and (v) the Originator Disclosure is true and
correct in all material respects and nothing has come to his or her
attention that that would lead such officer to believe that the
Originator Disclosure contains any untrue statement of material fact or
omits to state a material fact necessary to make the statements therein
not misleading.
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(o) The Underwriter shall have received a certificate (upon
which ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP shall be entitled to rely in rendering its
opinions and letters under the Basic Documents) dated the Closing Date
of an officer of the Servicer in which such officer shall state that,
to the best of such officer's knowledge after reasonable investigation:
(i) except as disclosed, the Servicer is not an affiliate of any other
entity listed as a transaction party in the Prospectus Supplement; (ii)
the information in the Prospectus Supplement related to the Servicer
(the "Servicer Disclosure") includes (a) the Servicer's correct name
and form of organization, (b) the correct length of time that the
Servicer has been servicing mortgage loans; and (c) a discussion of the
Servicer's experience in servicing mortgage loans; (iii) except as set
forth in the Servicer Disclosure, (a) there are no other servicers
responsible for calculating or making distributions to the holders of
the Offered Certificates, performing work-outs or foreclosures, or any
other material aspect of servicing the mortgage loans, (b) there have
been no material changes to the Servicer's servicing policies and
procedures during the last three years, (c) no additional information
regarding the Servicer's financial condition could have a material
affect on performance of the Offered Certificates, (d) no commingling
of funds on deposit in collection accounts will be permitted by the
Servicer, (e) no additional information with respect to any special or
unique factors involved in servicing the mortgage loans could have a
material affect on performance of the Offered Certificates, and (f) no
additional information with respect to the Servicer's process for
handling delinquencies, losses, bankruptcies and recoveries could have
a material affect on performance of the Offered Certificates; (iv) for
the Servicer identified in the Prospectus Supplement as responsible for
calculating or making distributions to the holders of the Offered
Certificates, performing work-outs or foreclosures, or any other
material aspect of servicing the mortgage loans, the certifications in
clauses (ii) and (iii) above are made with respect to the Servicer; and
(v) the Servicer Disclosure is true and correct in all material
respects and nothing has come to his or her attention that that would
lead such officer to believe that the Servicer Disclosure contains any
untrue statement of material fact or omits to state a material fact
necessary to make the statements therein not misleading.
The Company will provide or cause to be provided to the Underwriter
such conformed copies of such opinions, certificates, letters and documents as
the Underwriter may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
If any condition specified in this Section 6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter by notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Section 7.
11
SECTION 7. Reimbursement of the Underwriter's Expenses. If the sale of
the Offered Certificates provided for herein is not consummated because any
condition to the obligations of the Underwriter set forth in Section 6 hereof is
not satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Underwriter, the Company will reimburse
the Underwriter upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been reasonably incurred by
the Underwriter in connection with the proposed purchase and sale of the Offered
Certificates.
SECTION 8. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless the Underwriter and any person who controls the
Underwriter within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or either 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 (1) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement for
the registration of the Offered Certificates as originally filed or in any
amendment thereof, or in the Basic Prospectus or the Final Prospectus or the
Disclosure Package, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, (2) any untrue statement or alleged untrue statement of a material
fact contained in any Issuer Free Writing Prospectus or any Issuer Information
(as defined in Section 12(b)) contained in any Free Writing Prospectus prepared
by or on behalf of the Underwriter or in any Free Writing Prospectus which is
required to be filed pursuant to Section 12(e) or Section 12(g), or the omission
or alleged omission to state a material fact required to make the statements
therein, in light of the circumstances under which they were made, not
misleading, which was not corrected by information subsequently supplied by the
Depositor to the Underwriter at any time prior to the time of sale, and agrees
to reimburse the Underwriter and any such controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action and (3) any static
pool information prepared by the Company and incorporated by reference into a
prospectus or Free Writing Prospectus in connection with the offering of the
Offered Certificates, to the extent not included above; provided, however, that
(i) the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made (A)
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Underwriter specifically for use in
connection with the preparation thereof or (B) in any Current Report or any
amendment or supplement thereof, and (ii) such indemnity with respect to the
Prospectus shall not inure to the benefit of the Underwriter (or any person
controlling the Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased the Offered Certificates which are the
subject thereof if such person did not receive a copy of the Final Prospectus
(or the Final Prospectus as amended or supplemented) excluding documents
incorporated therein by reference at or prior to the confirmation of the sale of
such Offered Certificates to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in the Basic Prospectus was corrected in the Final Prospectus (or the
Final Prospectus as amended or supplemented). This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
12
(a) The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the
Registration Statement and each person who controls the Company within
the meaning of either the Act or the Exchange Act, to the same extent
as the foregoing indemnity from the Company to the Underwriter, but
only with reference to (A) written information relating to the
Underwriter furnished to the Company by or on behalf of the Underwriter
specifically for use in the preparation of the documents referred to in
the foregoing indemnity, or (B) any Free Writing Prospectus (as defined
in Section 12(a)) prepared by or on behalf of the Underwriter,
furnished to the Company by the Underwriter pursuant to Section 12 and
incorporated by reference in the Registration Statement or the Final
Prospectus, except that no such indemnity shall be available for any
losses, claims, damages, liabilities or actions in respect thereof
resulting from any error in any Issuer Information (as defined in
Section 12(b)) (an "Issuer Error") furnished by the Company to the
Underwriter in writing or by electronic transmission that was used in
the preparation of any Free Writing Prospectus or ABS Informational and
Computational Material, other than an Issuer Error as to which, prior
to the time of the sale of the Offered Certificates to the person
asserting a claim, the Company notified the Underwriter in writing of
the Issuer Error or provided in written or electronic form information
superseding or correcting such Issuer Error (in any such case, a
"Corrected Issuer Error"), and the Underwriter failed to notify such
person thereof or to deliver such person a corrected Free Writing
Prospectus. This indemnity agreement will be in addition to any
liability which the Underwriter may otherwise have. The Company
acknowledges that the statements set forth in the Prospectus Supplement
in the first sentence of the last paragraph on the cover page and in
the second, third and fourth paragraphs under the heading "Method of
Distribution" constitute the only information furnished in writing by
or on behalf of the Underwriter for inclusion in the documents referred
to in the foregoing indemnity (other than any Free Writing Prospectus
furnished to the Company by the Underwriter).
(b) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this Section 8.
In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified
party and the indemnifying party and the 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 the indemnifying party, the 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 the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the 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 shall not be
liable for the expenses of more than one separate counsel, approved by
the Underwriter in the case of subparagraph (a), representing the
indemnified parties under subparagraph (a) who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement
of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; 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).
13
(c) To provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraphs
(a) or (b) of this Section 8 is due in accordance with its terms but is
for any reason held by a court to be unavailable from the Company or
the Underwriter on the grounds of policy or otherwise, the Company or
the Underwriter shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) to which
the Company or the Underwriter may be subject, as follows:
(i) in the case of any losses, claims, damages and
liabilities (or actions in respect thereof) which do not arise
out of or are not based upon any untrue statement or omission
of a material fact in any Free Writing Prospectus, in such
proportion as is appropriate to reflect the relative benefit
received by the Company or the Underwriter; and
(ii) in the case of any losses, claims, damages and
liabilities (or actions in respect thereof) which arise out of
or are based upon any untrue statement or omission of a
material fact in any Free Writing Prospectus, in such
proportion as is appropriate to reflect the relative fault of
the Company and the Underwriter in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material
fact in such Free Writing Prospectus results from information
prepared by the Company or the Underwriter and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Notwithstanding anything to the contrary in this paragraph (c), 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 8, each person who
controls the Underwriter within the meaning of either the Act or the Exchange
Act shall have the same rights to contribution as the Underwriter and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, and 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 preceding
sentence of this paragraph (c). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (c), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (c).
14
SECTION 9. [Reserved.]
SECTION 10. Representations and Indemnities to Survive.
The respective agreements, representations, warranties, indemnities and
other statements of the Company and its respective officers and of the
Underwriter set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Offered Certificates. The provisions of Sections 7 and 8 hereof
and this Section 10 shall survive the termination or cancellation of this
Agreement.
SECTION 11. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
This Agreement shall be subject to termination in the absolute
discretion of the Underwriter, by notice given to the Company prior to delivery
of and payment for the Certificates, if prior to such time (i) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared by federal 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
Underwriter, impracticable to market the Offered Certificates.
SECTION 12. Offering Communications; Free Writing Prospectuses.
(a) Unless preceded or accompanied by a prospectus satisfying
the requirements of Section 10(a) of the Act, the Underwriter shall not
convey or deliver any written communication to any person in connection
with the initial offering of the Certificates, unless such written
communication (i) is made in reliance on Rule 134 under the Act, (ii)
constitutes a prospectus satisfying the requirements of Rule 430B under
the Act or (iii) constitutes a Free Writing Prospectus. Without
limitation thereby, without the prior written consent of the Company
(which consent may be withheld for any reason), the Underwriter shall
not convey or deliver in connection with the initial offering of the
Certificates any "ABS informational and computational material," as
defined in Item 1101(a) of Regulation AB under the Act ("ABS
Informational and Computational Material"), in reliance upon Rules 167
and 426 under the Act.
15
(b) (i) The Underwriter shall deliver to the Company, no later
than two business days prior to the date of first use thereof, (A) any
Free Writing Prospectus prepared by or on behalf of the Underwriter
that contains any "issuer information," as defined in Rule 433(h) under
the Act ("Issuer Information"), and (B) any Free Writing Prospectus or
portion thereof that contains only a description of the final terms of
the Certificates.
(ii) Notwithstanding the provisions of Section
12(b)(i), any Free Writing Prospectus described therein that
contains only ABS Informational and Computational Material,
may be delivered by the Underwriter to the Company not later
than the later of (a) two business days prior to the due date
for filing of the Prospectus pursuant to Rule 424(b) under the
Act or (b) the date of first use of such Free Writing
Prospectus.
(c) The Underwriter represents and warrants to the Company
that the Free Writing Prospectuses to be furnished to the Company by
the Underwriter pursuant to Section 12(b)(i) or (ii) will constitute
all Free Writing Prospectuses of the type described therein that were
furnished to prospective investors by the Underwriter in connection
with its offer and sale of the Certificates.
(d) The Underwriter represents and warrants to the Company
that each Free Writing Prospectus required to be provided by it to the
Company pursuant to Section 12(b)(i) or (ii) did not, as of the date
such Free Writing Prospectus was conveyed or delivered to any
prospective investor, include any untrue statement of a material fact
or omit any material fact required to be stated therein necessary to
make the statements contained therein, in light of the circumstances
under which they were made, not misleading; provided however, that the
Underwriter makes no representation to the extent such misstatements or
omissions were the result of any inaccurate Issuer Information supplied
by the Company to the Underwriter which information was not corrected
by information subsequently supplied by the Company to the Underwriter
prior to the sale to the investor of the Certificates which resulted in
a loss, claim, damage or liability arising out of a based upon such
misstatement or omission.
(e) The Company agrees to file with the Commission the
following:
(i) Any Free Writing Prospectus that constitutes an
"issuer free writing prospectus," as defined in Rule 433(h)
under the Act;
(ii) Any Free Writing Prospectus or portion thereof
delivered by the Underwriter to the Company pursuant to
Section 12(b) hereof; and
(iii) Any Free Writing Prospectus for which the
Company or any person acting on its behalf provided,
authorized or approved information that is prepared and
published or disseminated by a person unaffiliated with the
Company or any other offering participant that is in the
business of publishing, radio or television broadcasting or
otherwise disseminating communications.
16
(f) Any Free Writing Prospectus required to be filed pursuant
to Section 12(e) by the Company may be filed with the Commission not
later than the date of first use of the Free Writing Prospectus, except
that:
(i) any Free Writing Prospectus or portion thereof
required to be filed that contains only the description of the
final terms of the Certificates may be filed by the Company
within two days of the later of the date such final terms have
been established for all classes of Certificates and the date
of first use;
(ii) any Free Writing Prospectus or portion thereof
required to be filed that contains only ABS Informational and
Computational Material may be filed by the Company with the
Commission not later than the later of the due date for filing
the final Prospectus relating to the Certificates pursuant to
Rule 424(b) under the Act or two business days after the first
use of such Free Writing Prospectus;
(iii) any Free Writing Prospectus required to be
filed pursuant to Section 12(e)(iii) may, if no payment has
been made or consideration has been given by or on behalf of
the Company for the Free Writing Prospectus or its
dissemination, be filed by the Company with the Commission not
later than four business days after the Company becomes aware
of the publication, radio or television broadcast or other
dissemination of the Free Writing Prospectus; and
(iv) the Company shall not be required to file (A)
Issuer Information contained in any Free Writing Prospectus of
an offering participant other than the Issuer, if such
information is included or incorporated by reference in a
prospectus or Free Writing Prospectus previously filed with
the Commission that relates to the offering of the
Certificates, or (B) any Free Writing Prospectus or portion
thereof that contains a description of the Certificates or the
offering of the Certificates which does reflect the final
terms thereof.
(g) The Underwriter shall file with the Commission any Free
Writing Prospectus that is used or referred to by it and distributed by
or on behalf of the Underwriter in a manner reasonably designed to lead
to its broad, unrestricted dissemination not later than the date of the
first use of such Free Writing Prospectus.
(h) Notwithstanding the provisions of Section 12(g), the
Underwriter shall file with the Commission any Free Writing Prospectus
for which the Underwriter or any person acting on its behalf provided,
authorized or approved information that is prepared and published or
disseminated by a person unaffiliated with the Company or any other
offering participant that is in the business of publishing, radio or
television broadcasting or otherwise disseminating written
communications and for which no payment was made or consideration given
by or on behalf of the Company or any other offering participant, not
later than four business days after the Underwriter becomes aware of
the publication, radio or television broadcast or other dissemination
of the Free Writing Prospectus.
17
(i) Notwithstanding the provisions of Sections 12(e) and
12(g), neither the Company nor the Underwriter shall be required to
file any Free Writing Prospectus that does not contain substantive
changes from or additions to a Free Writing Prospectus previously filed
with the Commission.
(j) The Company and the Underwriter each agree that any Free
Writing Prospectuses prepared by the Underwriter shall contain the
following legend and any other legend that the Underwriter shall deem
necessary or appropriate:
The depositor has filed a registration statement
(including a prospectus) with the SEC for the offering to
which this communication relates. Before you invest, you
should read the prospectus in that registration statement and
other documents the depositor has filed with the SEC for more
complete information about the issuer and this offering. You
may get these documents for free by visiting ▇▇▇▇▇ on the SEC
Web site at ▇▇▇.▇▇▇.▇▇▇. Alternatively, the issuer, any
underwriter or any dealer participating in the offering will
arrange to send you the prospectus if you request it by
calling toll-free ▇-▇▇▇-▇▇▇-▇▇▇▇ or you e-mail a request to
▇▇.▇▇▇▇▇▇▇▇▇▇_▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. The securities
may not be suitable for all investors. Banc of America
Securities LLC and its affiliates may acquire, hold or sell
positions in these securities, or in the related derivatives,
and may have an investment or commercial banking relationship
with the issuer.
The asset-backed securities referred to in these materials,
and the asset pools backing them, are subject to modification
or revision (including the possibility that one or more
classes of securities may be split, combined or eliminated at
any time prior to issuance or availability of a final
prospectus) and are offered on a "when, as and if issued"
basis. You understand that, when you are considering the
purchase of these securities, a contract of sale will come
into being no sooner than the date on which the relevant class
has been priced and we have confirmed the allocation of
securities to be made to you; any "indications of interest"
expressed by you, and any "soft circles" generated by us, will
not create binding contractual obligations for you or us.
Because the asset-backed securities are being offered on a
"when, as and if issued" basis, any contract of sale will
terminate, by its terms, without any further obligation or
liability between us, if the securities themselves, or the
particular class to which the contract relates, are not
issued. Because the asset-backed securities are subject to
modification or revision, any such contract also is
conditioned upon the understanding that no material change
will occur with respect to the relevant class of securities
prior to the closing date. If a material change does occur
with respect to such class, our contract will terminate, by
its terms, without any further obligation or liability between
us (the "Automatic Termination"). If an Automatic Termination
occurs, we will provide you with revised offering materials
reflecting the material change and give you an opportunity to
purchase such class. To indicate your interest in purchasing
the class, you must communicate to us your desire to do so
within such timeframe as may be designated in connection with
your receipt of the revised offering materials.
18
The information contained in these materials may be based on
assumptions regarding market conditions and other matters as
reflected herein. Bank of America Securities LLC (the
"Underwriter") makes no representation regarding the
reasonableness of such assumptions or the likelihood that any
such assumptions will coincide with actual market conditions
or events, and these materials should not be relied upon for
such purposes. The Underwriter and its affiliates, officers,
directors, partners and employees, including persons involved
in the preparation or issuance of these materials, may, from
time to time, have long or short positions in, and buy and
sell, the securities mentioned herein or derivatives thereof
(including options). Information in these materials is current
as of the date appearing on the material only. Information in
these materials regarding any securities discussed herein
supersedes all prior information regarding such securities.
These materials are not to be construed as an offer to sell or
the solicitation of any offer to buy any security in any
jurisdiction where such an offer or solicitation would be
illegal.
This free writing prospectus is being delivered to you solely
to provide you with information about the offering of the
securities referred to in this free writing prospectus and to
solicit an offer to purchase the securities, when, as and if
issued. Any such offer to purchase made by you will not be
accepted and will not constitute a contractual commitment by
you to purchase any of the securities until we have accepted
your offer to purchase securities. You may withdraw your offer
to purchase securities at any time prior to our acceptance of
your offer.
The information in this free writing prospectus supersedes
information contained in any prior similar free writing
prospectus relating to these securities prior to the time of
your commitment to purchase.
19
This free writing prospectus is not an offer to sell or
solicitation of an offer to buy these securities in any state
where such offer, solicitation or sale is not permitted.
The Company and the Underwriter each agree that any Free Writing Prospectus
prepared by the Underwriter and that is not an Issuer Free Writing Prospectus or
that does not contain Issuer Information shall also contain the following
legend:
Neither the issuer of the securities nor any of its affiliates
prepared, provided, approved or verified any statistical or
numerical information presented herein, although that
information may be based in part on loan level data provided
by the issuer or its affiliates.
(k) The Company and the Underwriter agree to retain all Free
Writing Prospectuses that they have used and that are not required to
be filed pursuant to this Section 12 for a period of three years
following the initial bona fide offering of the Certificates.
(l) The Underwriter covenants with the Depositor that after
the final Prospectus is available the Underwriter shall not distribute
any written information concerning the Offered Certificates to a
prospective purchaser of Offered Certificates unless such information
is preceded or accompanied by the final Prospectus.
SECTION 13. 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 BAS shall be
directed to Banc of America Securities LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇-027-21-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇-▇▇▇▇▇▇; notices to the Company shall be directed to it at Asset Backed
Funding Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Associate General Counsel, with a copy to the
Treasurer.
SECTION 14. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company, the Underwriter, any controlling persons referred
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Offered Certificates from the Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 15. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW (BUT WITH
REFERENCE TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH BY
ITS TERMS APPLIES TO THIS AGREEMENT).
20
SECTION 16. No Advisory or Fiduciary Responsibility. The Company
acknowledges and agrees that: (i) the purchase and sale of the Offered
Certificates pursuant to this Agreement, including the determination of the
public offering price of the Offered Certificates and any related discounts and
commissions, is an arm's-length commercial transaction between the Company, on
the one hand, and the Underwriter on the other hand, and the Company is capable
of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to
such transaction the Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (iii) the Underwriter
has not assumed, nor will it assume, an advisory or fiduciary responsibility in
favor of the Company respect to any of the transactions contemplated hereby or
the process leading thereto (irrespective of whether the Underwriter has advised
or is currently advising the Company on other matters) or any other obligation
to the Company except the obligations expressly set forth in this Agreement;
(iv) the Underwriter and its affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and
that the Underwriter has no obligation to disclose any of such interests by
virtue of any fiduciary or advisory relationship; and (v) the Underwriter has
not provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.
The Company hereby waives and releases, to the fullest extent permitted
by law, any claims that the Company may have against the Underwriter with
respect to any breach or alleged breach of fiduciary duty.
SECTION 17. Miscellaneous.
(a) This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the
Underwriter with respect to the subject matter hereof.
(b) Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated except by a writing signed by the
party against whom enforcement of such change, waiver, discharge or
termination is sought.
(c) This Agreement may be signed in any number of counterparts
each of which shall be deemed an original, which taken together shall
constitute one and the same instrument.
(d) The headings of the Sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
SECTION 18. Non-Petition.
The Underwriter hereby agrees not to cause or participate in the filing
of a petition in bankruptcy against the Company for the non-payment to the
Underwriter of any amounts provided by this Agreement or otherwise until one
year and one day after the payment in full of all amounts due on the
Certificates in accordance with the terms of the Pooling and Servicing
Agreement.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign this Agreement and return it to us.
Very truly yours,
ASSET BACKED FUNDING CORPORATION
By: /s/ ▇▇▇▇▇ ▇. Good
---------------------------
Name: ▇▇▇▇▇ ▇. Good
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the date
first written above.
BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
Offered Certificates: Class A-1, Class A-2, Class A-3, Class A-4,
-------------------- Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-6, Class M-7,
Class M-8, Class M-9 and Class M-10.
Registration Statement
File Number: 333-127970
-----------
Initial Certificate Principal Balance of the Offered Certificates:
-----------------------------------------------------------------
Initial Class
Class Certificate Balance
--------------------------- ---------------------------
Class A-1 $152,118,000
Class A-2 $79,481,000
Class A-3 $94,509,000
Class A-4 $27,777,000
Class M-1 $25,852,000
Class M-2 $21,951,000
Class M-3 $10,731,000
Class M-4 $7,804,000
Class M-5 $9,268,000
Class M-6 $6,829,000
Class M-7 $10,000,000
Class M-8 $8,048,000
Class M-9 $5,609,000
Class M-10 $8,293,000
Purchase Price: $466,583,268.85
--------------
I-1
Classes of Book-Entry
Offered Certificates: Class A-1, Class A-2, Class A-3, Class A-4,
-------------------- Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-6, Class M-7,
Class M-8, Class M-9 and Class M-10.
Description of Mortgage
Loans: A pool of fixed and variable rate, first lien
----- residential mortgage loans having an aggregate
principal balance as of the Cut-off Date of
approximately $487,781,534. The Mortgage Loans
are secured by one- to four-family residential
properties.
Denominations: The Offered Certificates listed above under
------------- Classes of Book-Entry Certificates will be
issued in book-entry form. Each such Class of
Offered Certificates will be evidenced by one
or more certificates registered in the name of
Cede & Co. ("Cede") in the aggregate amount
equal to the initial Certificate Principal
Balance of such Class. Interests in such
Classes of Offered Certificates issued in the
name of Cede may be purchased by investors in
minimum denominations of $25,000 and integral
multiples of $1.
Cut-off Date: February 1, 2006.
------------
Pricing Date: 10:39 A.M., Eastern time, February 17, 2006.
------------
Certificate Interest Rate:
-------------------------
Class Certificate Interest Rate(1)
------------------------- ----------------------------------
Class A-1 LIBOR + 0.07% (2)
Class A-2 LIBOR + 0.13% (2)
Class A-3 LIBOR + 0.19% (2)
Class A-4 LIBOR + 0.30% (2)
Class M-1 LIBOR + 0.37% (3)
Class M-2 LIBOR + 0.40% (3)
Class M-3 LIBOR + 0.44% (3)
Class M-4 LIBOR + 0.51% (3)
Class M-5 LIBOR + 0.54% (3)
Class M-6 LIBOR + 0.67% (3)
Class M-7 LIBOR + 1.25% (3)
Class M-8 LIBOR + 1.45% (3)
Class M-9 LIBOR + 2.50% (3)
Class M-10 LIBOR + 2.50% (3)
I-2
(1) The interest accrual period for any distribution date and each class of
Offered Certificates will be the period from and including the preceding
distribution date, or in the case of the first distribution date, from the
closing date, through and including the day prior to the current
distribution date, and calculations of interest will be made on the basis
of the actual number of days in the interest accrual period and on a
360-day year.
(2) During each interest accrual period, each class of these Offered
Certificates will accrue interest at a floating rate equal to one-month
LIBOR as of the related LIBOR determination date plus the margin rate per
annum specified in this table for that class, subject to an interest rate
cap for such class. After the optional termination date, the margin rate
for each of the classes of these Offered Certificates will increase to 2
times their initial margin rates for such class.
(3) During each interest accrual period, each class of these Offered
Certificates will accrue interest at a floating rate equal to one-month
LIBOR as of the related LIBOR determination date plus the margin rate per
annum specified in this table for that class, subject to an interest rate
cap for such class. After the optional termination date, the margin rate
for each of the classes of these Offered Certificates will increase to 1.5
times their initial margin rates for such class.
Offered Certificate Ratings:
---------------------------
Class Fitch ▇▇▇▇▇'▇ S&P
----- ----- ------- ---
Class A-1 AAA Aaa AAA
Class A-2 AAA Aaa AAA
Class A-3 AAA Aaa AAA
Class A-4 AAA Aaa AAA
Class M-1 AA+ Aa1 AA+
Class M-2 AA Aa2 AA
Class M-3 AA- Aa3 AA-
Class M-4 A+ Aa3 A+
Class M-5 A A1 A
Class M-6 A- A2 A-
Class M-7 BBB+ A3 BBB+
Class M-8 BBB+ Baa1 BBB
Class M-9 BBB Baa2 BBB-
Class M-10 BBB- Baa3 None
I-3
SCHEDULE II
------------------------ -----------------------------------------
Class Banc of America Securities LLC
------------------------ -----------------------------------------
Class A-1 $152,118,000
------------------------ -----------------------------------------
Class A-2 $79,481,000
------------------------ -----------------------------------------
Class A-3 $94,509,000
------------------------ -----------------------------------------
Class A-4 $27,777,000
------------------------ -----------------------------------------
Class M-1 $25,852,000
------------------------ -----------------------------------------
Class M-2 $21,951,000
------------------------ -----------------------------------------
Class M-3 $10,731,000
------------------------ -----------------------------------------
Class M-4 $7,804,000
------------------------ -----------------------------------------
Class M-5 $9,268,000
------------------------ -----------------------------------------
Class M-6 $6,829,000
------------------------ -----------------------------------------
Class M-7 $10,000,000
------------------------ -----------------------------------------
Class M-8 $8,048,000
------------------------ -----------------------------------------
Class M-9 $5,609,000
------------------------ -----------------------------------------
Class M-10 $8,293,000
------------------------ -----------------------------------------
II-1
SCHEDULE III
DISCLOSURE PACKAGE
1. Free Writing Prospectus, in the form of a RMBS New Issue Term Sheet, filed
and accepted by the SEC on February 15, 2006, with a filing date of
February 15, 2006 and accession number 0001125282-06-001042.
2. Free Writing Prospectus and the related Base Prospectus, both filed and
accepted by the SEC on February 16, 2006, with a filing date of February
16, 2006 and accession number 0001125282-06-001098.
3. Free Writing Prospectus, in the form of spreadsheets containing information
on the mortgage loans in the form of collateral tape information, filed and
accepted by the SEC on February 21, 2006, with a filing date of February
21, 2006 and accession number 0001125282-06-001147.
III-1
