Exhibit 1.1
EXECUTION
NON-REMIC UA
FIRSTPLUS HOME LOAN OWNER TRUSTS
ASSET-BACKED SECURITIES
(Issuable in Series)
UNDERWRITING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. November 14, 1997
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
as Representative of the
several Underwriters
World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
FIRSTPLUS Investment Corporation, a corporation organized and
existing under the laws of the State of Nevada (the "Company"), proposes to
cause FIRSTPLUS Home Loan 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 related Trust 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, one or more affiliates of the Company and the
owner trustee named therein (the "Owner Trustee") and, to the extent
specified therein, the co-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
"Home Loans") having the original terms to maturity and interest rate types
specified in the related Terms Agreement referred to hereinbelow. Certain of
the Home Loans may be partially insured by the Federal Housing Administration
(the "FHA") of the United States Department of Housing and Urban Development
("HUD") pursuant to Title I of the National Housing Act of 1934, as amended
("Title I Home Loans"). Unless otherwise specified in the related Prospectus
Supplement and the related Sale and Servicing Agreement (as defined below),
the Company or its affiliate, as FHA Insurance Holder (the "FHA Insurance
Holder"), will enter into an FHA claims administration agreement (each, an
"FHA Claims Agreement") with FIRSTPLUS Financial, Inc. ("FFI"), as transferor
and servicer (the "Transferor" or "Servicer"), pursuant to which the Servicer
will administer, process and submit claims (the Servicer in such capacity,
the "FHA Claims Administrator") to the FHA in respect of Title I Home Loans.
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 seller (the "Seller"), the Servicer, the Indenture
Trustee and the related Trust, 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 Home Loans conveyed to the Trust on the Closing
Date (such Home Loans so conveyed to the Trust at such time, the "Initial
Home Loans"), the Seller 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 Home Loans (any such additional Home Loans so
conveyed to the Trust through the Pre-Funding Period, the "Subsequent Home
Loans").
The Securities may have the benefit of one or more insurance policies
(each, a "Policy") issued by the securities insurer named therein (the
"Securities Insurer") pursuant to an insurance and indemnity agreement among
the Seller, the Indenture Trustee, the Servicer and the Securities Insurer
(the "Insurance Agreement"). This Agreement, the related Terms Agreement,
the Trust Agreement, the Sale and Servicing Agreement, the FHA Claims
Agreement, the Indenture and the Insurance Agreement are sometimes referred
to herein as the "Operative Agreements".
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. 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 FFI
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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
▇▇▇▇▇ 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 on which such prospectus supplement was filed
as described above (such prospectus supplement, including such
incorporated documents, 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 required to be stated therein or
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 Home 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, in the case of the Offered
Securities, 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 consummation of the transactions
contemplated by the Operative Agreements to which the Company or
FFI is a party, nor the issuance and sale of the Securities of the
related Series nor the consummation of any other of the
transactions herein or therein 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 or
FFI of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company or FFI or
with any organizational document of the Company or FFI or any
instrument or any agreement under which the Company or FFI 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
and FFI.
(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 Trust Agreement, Sale
and Servicing Agreement and any related FHA Claims Agreement and,
assuming the due authorization, execution and delivery thereof by
the other parties thereto, such Trust Agreement, Sale and Servicing
Agreement and such FHA Claims 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 Trust
Agreement, Sale and Servicing Agreement or such FHA Claims
Agreement is considered in a proceeding in equity or at law).
(viii) The FHA Insurance Holder and the Transferor are
each approved by the FHA as a lender under the Title I program and
each holds a valid contract of insurance or approval for insurance
under the Title I program; the FHA Insurance Holder will have
received prior to each Closing Date or Subsequent Transfer Date, as
the case may be, all material consents, authorizations, orders and
approvals from governmental authorities, agencies or bodies and all
other material actions will have been taken prior to such Closing
Date or Subsequent Transfer Date that are necessary to permit the
FHA Insurance Holder to obtain the benefit of the FHA Insurance in
respect of the related Title I Home Loan as described in the
related Final Prospectus ,and the Transferor and the FHA Insurance
Holder will have completed prior to each Closing Date or Subsequent
Transfer Date, as the case may be, all material actions that are
necessary to duly and validly effect the transfer of the FHA
Insurance applicable to the Title I Home Loans into the FHA
contract of insurance coverage reserve account of the FHA Insurance
Holder.
(ix) If applicable, the related Policy, when
delivered, will constitute the legal, valid and binding obligation
of the Securities Insurer, enforceable in accordance with its
terms.
(x) 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 Seller of the requisite cash therein, in the manner
specified by such Indenture, Trust Agreement or Sale and Servicing
Agreement.
(xi) Immediately prior to the transfer and
assignment thereof on the Closing Date, and on any Subsequent
Transfer Date, the Transferor had good title to, and was the sole
owner of, each Home Loan and all action had been taken to obtain
good record title to each related Home Loan. Each Home Loan will,
as of such date(s), be transferred free and clear of any lien,
mortgage, pledge, charge, security interest, adverse claim or other
encumbrance.
(xii) There are no actions, proceedings or
investigations pending or threatened by any court, administrative
agency or other tribunal to which the Company or FFI is a party or
of which any of their properties is the subject (a) which if
determined adversely to the Company or FFI would have a material
adverse effect on the business or financial condition of the
Company or FFI, (b) asserting the invalidity of the Offered
Securities or any Operative Agreement to which the Company or FFI
is a party, (c) seeking to prevent the issuance of the Offered
Securities or the consummation by the Company or FFI of any of the
transactions contemplated by any of the Operative Agreements to
which the Company or FFI is a party, or (d) which might materially
and adversely affect the performance by the Company or FFI of any
of their respective obligations under, or the validity or
enforcement of, the Offered Securities or any of the Operative
Agreements to which it is a party.
(xiii) Neither the Seller, 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 ▇▇▇▇ ▇▇▇) of an "investment company" that is
registered or required to be registered under, or is otherwise
subject to the provisions of, the 1940 Act.
(xiv) The Indenture has been qualified under the
Trust Indenture Act of 1939.
(xv) Since the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, except as otherwise stated therein, (A) there has been
no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) except for monthly
distributions made to the Company's parent in the ordinary course
of business, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(xvi) Since the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, except as otherwise stated therein, (A) there has been
no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business, (B) there have been no transactions entered into by FFI
or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to FFI and its
subsidiaries considered as one enterprise, and (C) except for
regular dividends on the common stock of FFI in amounts per share
that are consistent with past practice, there has been no dividend
or distribution of any kind declared, paid or made by FFI on any
class of its capital stock.
(xvii) Each of the Company and FFI has been duly
organized and is validly existing as a corporation in good standing
under the laws of the States of Nevada and Texas, respectively, and
has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Final
Prospectus and to enter into and perform its obligations under this
Agreement; and each of the Company and FFI is duly qualified as a
foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(xviii) No filing with, or authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is
necessary or required for the performance by the Company or FFI of
its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of
the transactions contemplated by this Agreement, except such as
have been already obtained or as may be required under the Act or
the regulations thereunder or state securities laws.
(xix) Any information concerning the
characteristics of the Home Loans furnished by the Company or FFI
to the Underwriter in writing or by electronic transmission for use
in the preparation of Computational Materials or Structural Term
Sheets was accurate in all material respects as of the date
furnished.
2. Purchase and Sale. Subject to the execution of the Terms
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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
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Offered Securities of a Series shall be made at the specified offices of
▇▇▇▇▇ & Wood LLP, 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
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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 FFI agree with the
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Underwriters that:
(a) The Company will cause each of the Preliminary Prospectus
and the Final Prospectus 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 have been so filed, and prior to the termination of
the Offering to which such Preliminary Prospectus and Final Prospectus
relate 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 to the Underwriters 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 (each such filing of such
materials and of any Collateral Term Sheets, 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. 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 Home 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 required to be stated therein or
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 as
are furnished to the Company by the Underwriters pursuant to Section
8(d) 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, as many signed copies of the
related Registration Statement (including exhibits thereto) 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 or
such taxation.
(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 and officer's
compliance certificate when and as the same are so furnished to the
Indenture Trustee pursuant to the related Sale and Servicing Agreement.
In addition, the Company shall, or shall cause the Owner Trustee to,
furnish to the Representative copies of each statement to Holders of the
Offered Securities when and as the same are furnished to such Holders
pursuant to the applicable Operative Agreement, but only if such
statement is not publicly available.
(g) During a period of 30 days from the date of the Final
Prospectus, the Company will not, without prior written consent of
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, directly or
indirectly, issue, sell, offer or contract to sell, grant any option for
the sale of, or otherwise transfer or dispose of, any Series of
Securities of the Trust other than the specified Classes of Offered
Securities designated in the related Terms Agreement.
(h) 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, (i) 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, (ii) the cost of delivering the related Offered Securities
to the office of the Underwriters, insured to the satisfaction of the
Underwriters, (iii) the fees and disbursements of the Seller's and the
Servicer's counsel and accountants, (iv) 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, (v) the printing, word processing and
duplicating expenses and supervision related to preparation of and
delivery to the Underwriters of copies of any document contemplated
hereunder and any blue sky survey and legal investment survey, (vi) the
fees of rating agencies, (vii) the fees and expenses, if any, incurred
in connection with the listing of the Offered Securities on any national
securities exchange, (viii) 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, (ix) the fees and expenses of the
Indenture Trustee, the Owner Trustee, any custodian, the backup servicer
and the Securities Insurer, and their respective counsel, and (x) any
such other related expenses not specified above.
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) ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company, 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.
(c) General Counsel for the Company and FFI shall have
furnished to the Underwriters an opinion, dated the related Closing
Date, in form and substance reasonably acceptable to the Underwriters,
to the effect that:
(i) Each of the Company and FFI 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 the Operative Agreements to which it is a party
and to cause the issuance and sale of the Securities of the related
Series, as applicable;
(ii) The Company has full power and authority to
deposit the related Home Loans as contemplated herein and in the
related Trust Agreement, and FFI has full power and authority to
transfer and service the related Home 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 or FFI of the transactions
contemplated in the Operative Agreements to which it is a party or
(b) the Company or FFI of the transactions contemplated herein or
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, if any, 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 FFI, as applicable, or any statute, order
or regulation applicable to the Company or FFI of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Company or FFI, 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
material agreement or instrument to which the Company or FFI 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, if any, or the related Securities, (ii)
seeking to prevent the issuance of the Securities of the related
Series or the consummation by the Company or FFI, 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, if any, or (iii) which
might materially and adversely affect the performance by the
Company or FFI, 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, if any, or the related
Securities.
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 Company or FFI or of public officials.
(d) The Underwriters shall have received from Stroock &
Stroock & ▇▇▇▇▇ LLP, 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 and dated the related Closing Date, to the effect that the
signer of such certificate has 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 Home Loans, this
Agreement and the related Terms Agreement and that:
(i) the representations and warranties of the
Company and FFI in this Agreement, as supplemented by the related
Terms 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 his or her knowledge,
threatened; and
(iii) nothing has come to his or her 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 any
related Current Report) contains any untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, or that the Form 8-K relating to
the Subsequent Home 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 for purposes of state tax law
where the Owner Trustee maintains possession of the assets of the Trust
as are customary and reasonably satisfactory to the Underwriters.
(h) Ernst & Young LLP 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, the Home Loans and certain matters relating to the Company
and the Servicer.
(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 Securities 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 certain matters relating to the Securities
Insurer.
In rendering such 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 Securities Insurer, if any, or of public
officials.
(k) The Owner Trustee shall have received from the Seller all
funds required to be delivered by the Seller to be deposited in any
account required to be established in accordance with the related Trust
Agreement.
(l) If applicable, the Servicer, as FHA Claims Administrator,
and the Seller, as FHA Insurance Holder, shall have executed and
delivered the FHA Claims Agreement in form and substance reasonably
acceptable to the Underwriters.
(m) The Offered Securities of the related Series shall have
received the ratings specified in the related Terms Agreement (the
"Required Ratings").
(n) On or prior to the Closing Date, there shall have been no
downgrading, nor shall any notice have been given of (i) any intended or
possible downgrading or (ii) any review or possible changes, the
direction of which has not been indicated, of 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 term is defined for purposes
of the Exchange Act).
(o) If applicable, on or prior to the Closing Date, there has
been no downgrading, nor shall any notice have been given of (i) any
intended or possible downgrading or (ii) any review or possible changes,
the direction of which has not been indicated, of the rating accorded
the Securities Insurer's claims paying ability by any "nationally
recognized statistical rating organization" (as such term is defined for
purposes of the Exchange Act).
(p) 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 Securities Insurer, if any, 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.
(q) 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. If such cancellation
results from any of the conditions specified in this Section 6 not having
been fulfilled in all material respects due to the failure of either the
Company or FFI to fulfill its respective obligations under this Agreement or
the Operative Documents, the Company and FFI shall reimburse the Underwriters
for all of their reasonable out-of-pocket expenses relating to the proposed
issuance of the particular Offered Securities of a Series, including the
reasonable fees and disbursements of counsel for 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
--------------------------------
FFI, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
relating to the Offered Securities of the applicable Series (or any amendment
thereto), or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or the Final
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the third sentence of Section 7(c) hereof, the fees
and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above; provided, however,
that (i) this indemnity agreement shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made therein (A) in reliance
upon and in conformity with written information furnished to the Company and
FFI by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or any Preliminary
Prospectus or the Final Prospectus (or any amendment or supplement thereto)
or (B) in any Computational Materials or ABS Term Sheets (as defined in
Section 9(a) below) 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 or alleged omission therefrom results directly from an error (a
"Home Loan Pool Error") in the information concerning the characteristics of
the Home 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, (ii) such indemnity with respect to any Corrected Statement (as
defined below) in such Final Prospectus (or supplement thereto) shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any loss, claim, damage or
liability purchased the Securities of the related Series that are the subject
thereof if the untrue statement or omission of a material fact contained in
such Final Prospectus (or supplement thereto) was corrected (a "Corrected
Statement") in a supplement to such Final Prospectus, such supplement was
furnished by the Company to the Underwriters prior to the delivery of the
confirmation of sale of such Securities, and the person asserting such loss,
claim, damage or liability did not receive a copy of such supplement at or
prior to the confirmation of the sale of such Securities, and (iii) such
indemnity with respect to any Home Loan Pool Error shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any loss, claim, damage or liability received any
Computational Materials (or any written or electronic materials on which the
Computational Materials are based) or ABS Term Sheets that were prepared on
the basis of such Home Loan Pool Error, if, prior to the time of confirmation
of the sale of the applicable Securities to such person, the Company notified
the Underwriters of the Home Loan Pool Error or provided in written or
electronic form information superseding or correcting such Home Loan Pool
Error (in any such case, a "Corrected Home Loan Pool Error"), and such
Underwriter failed to notify such person thereof or to deliver to such person
corrected Computational Materials (or underlying written or electronic
materials) or ABS Term Sheets. This indemnity agreement will be in addition
to any liability that the Company or FFI may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement relating to the Offered Securities of the applicable Series, and
each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to (A)
untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or any
Preliminary Prospectus or the Final Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company or FFI by such Underwriter through
▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement (or any
amendment thereto) or such Preliminary Prospectus or the Final Prospectus (or
any amendment or supplement thereto), 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 Home Loan Pool Error, other
than a Corrected Home Loan Pool Error). This indemnity agreement will be in
addition to any liability that each Underwriter may otherwise have. The
Company acknowledges that the Underwriter-Provided Information constitutes
the only information furnished in writing by or on behalf of the Underwriters
for inclusion in the related Preliminary Prospectus or Final Prospectus
(other than any Computational Materials or ABS Term Sheets (or amendments or
supplements thereof)). "Underwriter-Provided Information" means any
statements provided to the Company by the Underwriters specifically for use
in the preparation of the related Preliminary Prospectus or Final Prospectus
and designated as such in the Terms Agreement for the related Series, and any
Computational Materials or ABS Term Sheets furnished to prospective investors
in the related Securities.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve such indemnifying party from any
liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified
party) be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel, if retention of local counsel is necessary
in the determination of the indemnifying party) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances.
(d) For purposes of this Section 7, all references to the Registration
Statement, any Preliminary Prospectus or the Final Prospectus, or any
amendment or supplement to any of the foregoing, shall be deemed to include,
without limitation, any electronically transmitted copies thereof, including,
without limitation, any copies filed with the Commission pursuant to ▇▇▇▇▇.
(e) If the indemnification provided for in paragraph (a) or (b) of this
Section 7 is for any reason unavailable to or insufficient to hold harmless
an indemnified party in respect of any losses, liabilities, claims, damages
or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Company and FFI on the one hand and the Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
and FFI on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
FFI on the one hand and the Underwriters on the other hand in connection with
the offering of the Securities pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and FFI and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Final Prospectus, bear to the aggregate initial public offering price of the
Securities as set forth on such cover. The relative fault of the Company and
FFI on the one hand and the Underwriters on the other hand 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 relates to information supplied by the Company and FFI
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and FFI and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subparagraph (e) were determined
by pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
subparagraph (e). The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above
in this subparagraph (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement
or omission or alleged omission. Notwithstanding the provisions of this
subparagraph (e), no Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this subparagraph (e), each
person, if any, who controls an Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company or FFI,
each officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company or FFI within the meaning of Section
15 of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company and FFI. The Underwriters' respective
obligations to contribute pursuant to this subparagraph (e) are several in
proportion to the number of Offered Securities set forth opposite their
respective names in the related Terms Agreement and not joint.
8. Computational Materials and Structural Term Sheets. (a) In
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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 ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ Acceptance Corporation I, ▇▇▇▇▇▇, Peabody & Co. Incorporated, and
▇▇▇▇▇▇ 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 "▇▇▇▇▇▇ Letters"), the filing of
which material is a condition of the relief granted in such letters (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"), the filing of which 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 severally 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; and
(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.
(c) Each Underwriter acknowledges and agrees that any
Computational Materials or Structural Term Sheets with respect to any Series
of Securities furnished to prospective investors in the related Securities
have been prepared and disseminated by or on behalf of such Underwriter and
not by or on behalf of the Company, and that such materials included and
shall include a disclaimer in form satisfactory to the Company to the effect
that such materials have been prepared and disseminated by such Underwriter,
and that the content and accuracy of such materials have not been reviewed by
the Company.
(d) 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 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 an
amendment which will effect such compliance.
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 Home Loans.
(b) Each Underwriter severally 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 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.
(c) Each Underwriter acknowledges and agrees that any Collateral
Term Sheets with respect to any Series of Securities furnished to prospective
investors in the related Securities have been prepared and disseminated by or
on behalf of such Underwriter and not by or on behalf of the Company, and
that such materials shall include a disclaimer in form satisfactory to the
Company to the effect set forth in Section 8(c) hereof, and to the effect
that the information contained in such materials supersedes the information
contained in any prior Collateral Term Sheet with respect to such Series of
Securities and will be superseded by the description of the related Home
Loans in the related Prospectus Supplement . Each Underwriter agrees that it
will not represent to prospective investors that any Collateral Term Sheets
were prepared or disseminated on behalf of the Company.
(d) 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 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.
10. Delivery and Filing of Computational Materials, Collateral
----------------------------------------------------------
Term Sheets and Structural Term Sheets.
--------------------------------------
(a) Any delivery of Computational Materials, Collateral Term
Sheets or Structural Term Sheets that is required to be made by an
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 on a Current Report on Form 8-K any such Computational
Materials, Collateral Term Sheets or Structural Term Sheets promptly
following the delivery thereof pursuant to the preceding subsection.
11. Termination. This Agreement (with respect to a particular
-----------
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) if trading in any securities of the Company
or its parent company have been suspended or materially limited on NASDAQ or
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, FFI or their 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, FFI or any of the officers,
directors or 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 set forth herein and in the applicable Terms
Agreement. If, however, you have not completed such arrangements within such
24-hour period, then:
(a) if the aggregate original principal balance of Defaulted
Securities does not exceed 10% of the aggregate original 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 principal balance of Defaulted
Securities exceeds 10% of the aggregate original 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. Guarantor. FIRSTPLUS Financial Group, Inc., the parent of
---------
the Company and FFI ("FFG"), shall guarantee any obligation or liability of
the Company or FFI pursuant to Section 7 hereof. FFG's acceptance of its
guarantee obligation is acknowledged by the execution of the signature page
of this Agreement by an authorized signatory of FFG.
15. 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 Security from the Underwriters shall
be deemed a successor or assign by reason of such purchase.
16. 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.
17. 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.
18. 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 address first above written; (B) to the Company at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; and (C) to FFI at FIRSTPLUS Financial, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
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
among the Company, FFI and the Underwriters.
Very truly yours,
FIRSTPLUS INVESTMENT CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FIRSTPLUS FINANCIAL INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Acknowledged by:
FIRSTPLUS FINANCIAL GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
as Representative of
the several Underwriters
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name:
Title:
EXECUTION
FIRSTPLUS HOME LOAN TRUST 1997-4
ASSET-BACKED SECURITIES
TERMS AGREEMENT
---------------
(to Underwriting Agreement,
dated November 14, 1997
among the Company, FFI, FFG and the Representative)
FIRSTPLUS Investment Corporation November 14, 1997
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
FIRSTPLUS Financial Inc.
1600 Viceroy
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
This letter supplements and modifies the captioned Underwriting
Agreement (the "Underwriting Agreement") with respect to the Series 1997-4
Securities solely as it relates to the purchase and sale of such Offered
Securities described below. The Series 1997-4 Securities are registered with
the Securities and Exchange Commission by means of an effective Registration
Statement (No. 333-26527). Capitalized terms used and not defined herein
have the meanings given them in the Underwriting Agreement.
Section 1. The Home Loan Pool: The Series 1997-4 Securities
------------------
shall evidence the entire beneficial ownership interest in a mortgage pool
(the "Home Loan Pool") of mortgage loans (the "Home 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
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following Class designations, interest rates and principal balances, subject
in the aggregate to the variance referred to in the Prospectus Supplement:
Principal Interest Class Purchase
Class Balance Rate(1) Price Percentage
Class A-1 Notes $182,000,000 (2) 99.90000%
Class A-2 Notes $111,000,000 6.30% 99.87022%
Class A-3 Notes $ 85,500,000 6.40% 99.81724%
Class A-4 Notes $ 87,200,000 6.57% 99.78707%
Class A-5 Notes $ 50,600,000 6.62% 99.74253%
Class A-6 Notes $ 71,500,000 6.82% 99.70406%
Class A-7 Notes $ 55,000,000 6.96% 99.62293%
Class A-8 Notes $ 61,675,000 7.31% 99.59287%
Class M-1 Notes $ 90,900,000 7.14% 99.28284%
Class M-2 Notes $ 47,722,500 7.33% 99.17968%
____________________
(1) The Interest Rate will be increased by 0.50% beginning after the Initial
Call Date, as defined in the Memorandum.
(2) Interest will accrue on the Class A-1 Notes with respect to each Payment
Date at a per annum rate equal to LIBOR for the related Accrual Period
plus 0.14%, subject to a maximum rate equal to the Net Weighted Average
Rate. Capitalized terms are as defined in the Prospectus Supplement.
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 1997-4 Securities
specified opposite its name below.
▇▇▇▇▇▇▇ ▇▇▇▇▇, Banc One
▇▇▇▇▇▇, ▇▇▇▇▇▇ & Capital Bear, ▇▇▇▇▇▇▇ PaineWebber
Class ▇▇▇▇▇ Incorporated Corporation & Co. Inc. Incorporated
----- ------------------ ----------- ------------- ------------
Class A-1 $45,500,000 $45,500,000 $45,500,000 $45,500,000
Notes
Class A-2 $27,750,000 $27,750,000 $27,750,000 $27,750,000
Notes
Class A-3 $21,375,000 $21,375,000 $21,375,000 $21,375,000
Notes
Class A-4 $21,800,000 $21,800,000 $21,800,000 $21,800,000
Notes
Class A-5 $12,650,000 $12,650,000 $12,650,000 $12,650,000
Notes
Class A-6 $17,875,000 $17,875,000 $17,875,000 $17,875,000
Notes
Class A-7 $13,750,000 $13,750,000 $13,750,000 $13,750,000
Notes
Class A-8 $15,418,000 $15,418,000 $15,418,000 $15,418,000
Notes
Class M-1 $22,725,000 $22,725,000 $22,725,000 $22,725,000
Notes
Class M-2 $15,907,500 $15,907,500 $ 0 $15,907,500
Notes
(b) The Offered Securities shall have such other characteristics
as described in the Prospectus Supplement.
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 November 1, 1997 (or, in the case
of the Class A-1 Notes, from November 10, 1997) up to, but not including,
November 24, 1997 (the "Closing Date").
Section 4. Required Ratings: The Offered Securities, other
----------------
than the Class M-1 and Class M-2 Notes, shall have received Required Ratings
of at least "AAA" by each of Duff & ▇▇▇▇▇▇ Credit Rating Co. ("DCR"),
Standard & Poor's Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. ("S&P") and Fitch Investors Service, L.P. ("Fitch" and, together with
DCR and S&P, the "Rating Agencies"). The Class M-1 and Class M-2 Notes and
shall have received Required Ratings of at least "AA" and "A", respectively,
from each of the Rating Agencies.
Section 5. Underwriter-Provided Information: The Company
--------------------------------
acknowledges that the information set forth in (a) the first sentence of the
last paragraph on the cover page of the Prospectus Supplement, (b) the first
sentence of the last paragraph on page "iii" of the Prospectus Supplement,
(c) the first table under the caption "Underwriting" and the first paragraph
immediately thereafter in the Prospectus Supplement and (d) the second table
under the caption "Underwriting" and the first, second and fifth paragraphs
immediately thereafter in the Prospectus Supplement, as such information
relates to the Securities, constitute the only information furnished in
writing by or on behalf of the Underwriters for inclusion in such Prospectus
Supplement.
Section 6. Location of Closing: ▇▇▇▇▇ & ▇▇▇▇ LLP, 815
-------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
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,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
as Representative of the several
Underwriters
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
FIRSTPLUS INVESTMENT CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FIRSTPLUS FINANCIAL INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Acknowledged by:
FIRSTPLUS FINANCIAL GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President