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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 9, 1996
(Date of earliest event reported)
FIRSTPLUS INVESTMENT CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 33-65373 75-2596063
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
3773 Howard Hughes Parkway
Suite 300N
Las Vegas, Nevada 89109
(Address of Principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (702) 892-3772
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Item 5. OTHER EVENTS.
Reference is hereby made to the Registrant's Registration Statement on Form
S-3 (File No. 33-65373) filed with the Securities and Exchange Commission (the
"Commission") on December 22, 1996, as amended by Amendment No. 1 thereto filed
with the Commission on April 23, 1996, as further amended by Amendment No. 2
thereto filed with the Commission on May 10, 1996 and as further amended by
Amendment No. 3 thereto filed with the Commission on May 22, 1996 (collectively,
the "Registration Statement"), pursuant to which the Registrant registered
$1,000,000,000 aggregate principal amount of its asset-backed certificates,
issuable in various series, for sale in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"). Reference is also hereby made
to the Prospectus dated June 14, 1996 and the related Prospectus Supplement,
dated June 14, 1996 (collectively, the "Prospectus"), which were previously
filed with the Commission pursuant to Rule 424(b)(5), with respect to the
Registrant's FIRSTPLUS Asset-Backed Certificates, Series 1996-2, consisting of
the following Classes of Certificates (collectively, the "Certificates"): (i)
Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-
4 Certificates, Class A-5 Certificates, Class A-6 Certificates, Class A-7
Certificates, and Class A-8 Certificates, (collectively, the "Offered
Certificates"), (ii) Class B Certificates, and (iii) Class R Certificates.
The Registrant is filing this Current Report on Form 8-K to (i) report the
offering and sale by the Registrant of the Offered Certificates on June 21, 1995
for an aggregate net proceeds amount of $240,119,310.05, plus accrued interest
at the applicable Certificate Interest Rate from June 1, 1996, and (ii) file the
opinion from Andrews & Kurth L.L.P., as counsel to the Registrant in connection
with the issuance of such Series of Certificates, with respect to the material
tax aspects of such Series of Certificates (a copy of such opinion is attached
hereto as EXHIBIT 8.1). The Offered Certificates were sold to Bear, Stearns &
Co. Inc. and Banc One Capital Corporation, as underwriters (the "Underwriters")
pursuant to the terms of an underwriting agreement dated as of June 14, 1996
(the "Underwriting Agreement") between the Underwriters, the Registrant and
FIRSTPLUS FINANCIAL, INC. ("FFI"), as supplemented by a terms agreement of even
date therewith between the Underwriters, the Registrant and FFI. A copy of the
Underwriting Agreement is attached hereto as EXHIBIT 1.1.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit No. Description
----------- -----------
1.1 Underwriting Agreement dated as of June 14, 1996
between the Underwriters, the Registrant and FIRSTPLUS
FINANCIAL, INC.
8.1 Opinion of Andrews & Kurth L.L.P. regarding tax matters
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
FIRSTPLUS INVESTMENT CORPORATION
July 9, 1996 By: /s/ Christopher J. Gramlich
----------------------------------------------
Christopher J. Gramlich, Senior Vice President
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EXHIBIT 1.1
EXECUTION
FIRSTPLUS HOME LOAN TRUSTS
ASSET-BACKED CERTIFICATES
(Issuable in Series)
UNDERWRITING AGREEMENT
Banc One Capital Corporation June 14, 1996
300 Crescent Court
Dallas, Texas 75201
Attention: Soc Aramburu
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: Tim Small
Ladies and Gentlemen:
FIRSTPLUS INVESTMENT CORPORATION, a corporation organized and existing
under the laws of the State of Nevada (the "Company"), may offer for sale from
time to time its Asset-Backed Certificates evidencing interests in pools of
certain contracts and mortgage loans (the "Certificates"). The Certificates 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 Series of the Certificates
will be issued under a separate Pooling and Servicing Agreement (each, a
"Pooling and Servicing Agreement") to be dated as of the respective cut-off date
(each, a "Cut-off Date") between the Company or one of its affiliates, as
depositor and FHA Insurance holder (the "Depositor" and in such latter capacity,
the "FHA Insurance Holder"), FIRSTPLUS FINANCIAL, INC., ("FFI") as transferor
and servicer (the "Transferor" or "Servicer"), the certificate insurer named
therein (the "Certificate Insurer"), if any, and the trustee named therein (the
"Trustee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the related Pooling and Servicing Agreement.
The Certificates issued under each Pooling and Servicing Agreement
will represent the entire beneficial ownership interest in a trust fund (the
"Trust Fund") established by such Pooling and Servicing Agreement. The assets
of each Trust Fund will consist primarily of a pool of fixed- or adjustable-
rate, fully-amortizing property improvement and/or
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debt consolidation loans, and the related notes and mortgages (collectively,
the "Mortgage Loans") having the original terms to maturity and interest rate
types specified in the related Terms Agreement referred to hereinbelow.
Certain of the Mortgage 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 Mortgage Loans"). Unless otherwise specified in
the related Prospectus Supplement and Pooling and Servicing Agreement, the
Depositor, in its capacity as FHA Insurance Holder, will enter into an FHA
claims administration agreement (each, an "FHA Claims Agreement") with the
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 Mortgage Loans.
If and to the extent specified in the related Pooling and Servicing
Agreement, in addition to the Mortgage Loans conveyed to the Trustee on the
Closing Date (such Mortgage Loans so conveyed to the Trustee at such time, the
"Initial Mortgage Loans"), the Depositor shall be obligated to convey to the
Trustee, from time to time during the period commencing after the Closing Date
and ending at the expiration of the period specified in such Pooling and
Servicing Agreement (each, a "Pre-Funding Period")(the date of any such
conveyance, a "Subsequent Transfer Date"), additional Mortgage Loans (any such
additional Mortgage Loans so conveyed to the Trustee through the Pre-Funding
Period, the "Subsequent Mortgage Loans").
The Certificates may have the benefit of one or more certificate insurance
policies (each, a "Policy") issued by the Certificate Insurer pursuant to an
indemnity and insurance agreement among the Depositor, the Trustee, the Servicer
and the Certificate Insurer (the "Insurance Agreement"). If so specified in the
related Terms Agreement, one or more elections may be made to treat the assets
of each Trust Fund as a real estate mortgage investment conduit (each, a
"REMIC") for federal income tax purposes.
Underwritten offerings of Certificates may be made through you or
through an underwriting syndicate managed by you. The Company proposes to sell
one or more Series of the Certificates 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 Certificates
(each, a "Certificate 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 Certificates (as defined below) to, and the
purchase and
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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 Certificates of any series or as a
member of an underwriting syndicate). Each such Certificate Offering which
the Company elects to make pursuant to this Agreement shall be governed by
this Agreement, as supplemented by the related Terms Agreement, and this
Agreement and such Terms Agreement shall inure to the benefit of and be
binding upon each underwriter participating in the offering of such Offered
Certificates. Each Terms Agreement, which shall be substantially in the form
of Exhibit A hereto, shall specify, among other things, the Classes of
Certificates to be purchased by the Underwriters (the "Offered
Certificates"), the principal balance or balances of the Offered
Certificates, 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
Certificates are to be purchased by the Underwriters from the Company.
1. REPRESENTATIONS AND WARRANTIES. (a) The Company and FFI
represent and warrant to and agrees 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 certificates 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 Certificates of the related Series,
each in the form first filed via EDGAR 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
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the Act which were filed under the Exchange Act on or before the
date of such Prospectus Supplement (other than any such incorporated
documents that relate to Collateral Term Sheets (as defined herein))
(such prospectus supplement, including such incorporated documents
(other than those that relate to Collateral Term Sheets), in the form
first filed after the date of the related Terms Agreement pursuant to
Rule 424(b) is hereinafter called the "Prospectus Supplement"), is
hereinafter called the "Final Prospectus". Any preliminary
prospectus, including any preliminary prospectus supplement which,
as completed, is proposed to be used in connection with the sale of
a Series of Offered Certificates and any prospectus filed with the
Commission pursuant to Rule 424(a) of the Act is hereinafter referred
to as a "Preliminary Prospectus. "Any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statement, the Preliminary Prospectus, the Final Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the
filing of any document under the Exchange Act after the effective date
of the Registration Statement or the issue date of the Preliminary
Prospectus, the Final Prospectus or Prospectus Supplement, as the case
may be, deemed to be incorporated therein by reference pursuant to
Item 12 of Form S-3 under the Act.
(ii) The related Registration Statement, at the time it became
effective, and the prospectus contained therein, and any amendments
thereof and supplements thereto filed prior to the date of the
related Terms Agreement, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder; on the date of the related Terms Agreement and
on each Closing Date (as defined in Section 3 below), the related
Registration Statement and the related Final Prospectus, and any
amendments thereof and supplements thereto, will conform in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder; such Registration Statement,
at the time it became effective, did not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; such Final Prospectus, on the date of any filing pursuant
to Rule 424(b) and on each Closing Date, will not include any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they are made, not
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misleading; and the Form 8-K relating to any Subsequent Mortgage
Loans, on the date of any filing thereof, will not include any untrue
statement of a material fact or omit to state any information which
such Final Prospectus states will be included in such Form 8-K;
provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from (A) such
Registration Statement or such Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriters
specifically for use in the preparation thereof or (B) any Current
Report (as defined in Section 5(b) below), or in any amendment thereof
or supplement thereto, incorporated by reference in such Registration
Statement or such Final Prospectus (or any amendment thereof or
supplement thereto).
(iii) The Certificates 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 Pooling and Servicing
Agreement and sold to you as provided herein and in the related Terms
Agreement, will each be validly issued and outstanding and entitled to
the benefits of the related Pooling and Servicing Agreement and, if
applicable, the related Policy.
(iv) Neither the issuance nor sale of the Certificates of the
related Series nor the consummation of any other of the transactions
herein contemplated, nor the fulfillment of the terms hereof or of the
related Terms Agreement, will conflict with any statute, order or
regulation applicable to the Company of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Company or with any organizational document of the Company or any
instrument or any agreement under which the Company is bound or to
which it is a party.
(v) This Agreement and the related Terms Agreement have been
duly authorized, executed and delivered by the Company.
(vi) At or prior to the related Closing Date, the Company will
have entered into the related Pooling and Servicing Agreement, any
related FHA Claims Agreement and any related Insurance Agreement and,
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assuming the due authorization, execution and delivery thereof by the
other parties thereto, such Pooling and Servicing Agreement, such FHA
Claims Agreement and such Insurance 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 Pooling and
Servicing Agreement, such FHA Claims Agreement or such Insurance
Agreement is considered in a proceeding in equity or at law).
(vii) The Depositor 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 Depositor as 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, which are necessary to permit the Depositor,
as FHA Insurance Holder, to obtain the benefit of the FHA Insurance in
respect of the related Title I Mortgage Loan as described in the
related Final Prospectus and will have completed prior to each Closing
Date or Subsequent Transfer Date, as the case may be, all material
actions of the Transferor and the Depositor that are necessary to duly
and validly effect the transfer of the FHA Insurance applicable to the
Title I Mortgage Loans into the FHA contract of insurance coverage
reserve account of the Depositor, as FHA Insurance Holder.
(viii) If applicable, the related Policy, when delivered, will
constitute the legal, valid and bind obligation of the Certificate
Insurer, enforceable in accordance with its terms.
(ix) Any funds or accounts established from time to time with
respect to a Series of Certificates in accordance with the related
Pooling and Servicing Agreement will have been properly funded at the
Closing Date by the deposit by the Depositor of the requisite cash
therein, in the manner specified by the Pooling and Servicing
Agreement.
(x) The related Trust Fund will either own, or have a valid and
perfected first priority
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security interest in, on the Closing Date, and at any Subsequent
Transfer Date, the Mortgage Loans and any funds or accounts to be
deposited or established with the Trustee for the benefit and security
of the holders of the related Certificates (and in any cash deposited
therein), free and clear of any lien, mortgage, pledge, charge,
security interest, adverse claim or other encumbrance.
(xi) Neither the Depositor, the Transferor, the Trust Fund 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 1940 Act) of an "investment company" that is registered or
required to be registered under, or is otherwise subject to the
provisions of, the 1940 Act.
2. PURCHASE AND SALE. Subject to the execution of the Terms
Agreement for a particular Certificate 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 Certificates set forth in the related Terms
Agreement opposite the name of such Underwriter, plus any additional original
principal amount of Offered Certificates which such Underwriter may be obligated
to purchase pursuant to Section 13 hereof, at the purchase price therefor set
forth in such Terms Agreement (the "Purchase Price").
The parties hereto agree that settlement for all securities sold
pursuant to this Agreement shall take place on the terms set forth herein and
not as set forth in Rule 15c6-1(a) under the Exchange Act.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Offered
Certificates of a Series shall be made at the specified offices of Andrews &
Kurth L.L.P., 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 Certificates 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 Certificates shall be registered in
such names and in
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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 Certificates and to have such Offered Certificates available for
inspection, checking and packaging in New York, New York, no later than 12:00
noon on the business day prior to such Closing Date.
4. OFFERING BY THE UNDERWRITERS. It is understood that the
Underwriters propose to offer the Offered Certificates 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 Underwriters
that:
(a) The Company will cause the each of the Preliminary
Prospectus and the Final Prospectus as supplemented by a Prospectus
Supplement relating to the Offered Certificates to be filed pursuant to
Rule 424 under the Act and will promptly advise the Underwriters when
such Preliminary Prospectus and such Final Prospectus as so
supplemented has been so filed, and prior to the termination of the
Certificate Offering to which such Preliminary Prospectus and Final
Prospectus relates also will promptly advise the Underwriters (i) when
any amendment to the related Registration Statement specifically
relating to such Offered Certificates 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 Certificates 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 pass-through
certificates other than the Series that includes the related Offered
Certificates) unless (i) the Company has given reasonable notice of its
intention to file any such amendment or supplement, (ii) the Company
has furnished the Underwriters with a copy for their review within a
reasonable time prior to filing, and (iii) the
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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 Certificates of a Series that are delivered by an
Underwriter to the Company pursuant to Section 8 to be filed with the
Commission on a Current Report on Form 8-K (a "Current Report")
pursuant to Rule 13a-11 under the Exchange Act in accordance with
Section 10 on the business day immediately following the date on which
the related Terms Agreement is executed and delivered. The Company will
cause any Collateral Term Sheet (as defined in Section 9 below) with
respect to the Offered Certificates 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 Mortgage
Loans for the related Series from those on which a Collateral Term
Sheet with respect to the related Series previously filed with the
Commission was based, the Company will cause any such Collateral Term
Sheet that is delivered by the Underwriters to the Company in
accordance with the provisions of Section 9 hereof to be filed with the
Commission on a Current Report in accordance with Section 10. Each such
Current Report shall be incorporated by reference in the related Final
Prospectus and the related Registration Statement.
(c) If, at any time when a prospectus relating to the Offered
Certificates of a Series is required to be delivered under the Act, any
event occurs as a result of which the related Final Prospectus as then
amended or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein in light of the circumstances under which they were made not
misleading, or if it shall be necessary at any time to amend or
supplement the related Final Prospectus to comply with the Act or the
rules thereunder, the Company promptly will prepare and file with
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the Commission, subject to paragraph (a) of this Section 5, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance; PROVIDED, HOWEVER, that the
Company will not be required to file any such amendment or supplement
with respect to any Computational Materials, Structural Term Sheets or
Collateral Term Sheets incorporated by reference in the Final
Prospectus other than any amendments or supplements of such
Computational Materials or Structural Term Sheets that are furnished to
the Company by the Underwriters pursuant to Section 8(e) hereof or any
amendments or supplements of such Collateral Term Sheets that are
furnished to the Company by the Underwriters pursuant to Section 9(d)
hereof which are required to be filed in accordance therewith.
(d) The Company will furnish to the Underwriters and counsel
for the Underwriters, without charge, and, so long as delivery of a
prospectus by the Underwriters or a dealer may be required by the Act,
as many copies of the related Preliminary Prospectus and the related
Final Prospectus and any supplements thereto (other than exhibits to the
related Current Report) as the Underwriters may reasonably request.
(e) The Company will furnish such information, execute such
instruments and take such actions as may be reasonably requested by the
Underwriters to qualify the Offered Certificates 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 Certificates and to determine the legality
of such Offered Certificates for purchase by investors; PROVIDED,
HOWEVER, that the Company shall not be required to qualify to do
business in any jurisdiction where it is not qualified on the date of
the related Terms Agreement or to take any action which would subject it
to general or unlimited service of process or corporate or franchise
taxation as a foreign corporation in any jurisdiction in which it is
not, on the date of the related Terms Agreement, subject to such service
of process.
(f) So long as the Offered Certificates of a Series are
outstanding, the Company will furnish to the Underwriters copies of the
annual independent public accountants' servicing report furnished to the
Trustee pursuant to the related Pooling and Servicing Agreement.
(g) Whether or not the transactions contemplated hereby and by
the related Terms Agreement shall be consummated, the Company shall be
responsible for the payment of any costs and expenses for which details
are
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submitted, in connection with the performance of its obligations under
this Agreement and the related Terms Agreement, including, without
limitation, (a) the cost and expenses of printing or otherwise
reproducing the related Registration Statement, the related Preliminary
Prospectus, the related Final Prospectus, this Agreement, the related
Terms Agreement, the related Pooling and Servicing Agreement and the
Offered Certificates, and (b) the cost of delivering the related Offered
Certificates to the office of the Underwriters, insured to the
satisfaction of the Underwriters, (c) the fees and disbursements of the
Depositor's and the Servicer's counsel and accountants, (d) the
qualification of the Certificates under state securities or blue sky
laws, including filing fees and the fees and disbursements of counsel
for you in connection therewith and in connection with the preparation
of any blue sky survey and legal investment survey, (e) the printing,
word processing and duplicating expenses and supervision related to
preparation of and delivery to the Underwriter of copies of any document
contemplated hereunder and any blue sky survey and legal investment
survey, (f) the fees of rating agencies, (g) the fees and expenses, if
any, incurred in connection with the listing of the Offered Certificates
on any national securities exchange, (h) the fees, if any, of the
National Association of Securities Dealers, Inc., and the fees and
expenses of counsel for you in connection with any required written
submission to or appearance before such entity, (i) the fees and
expenses of the Trustee, any custodian, the backup servicer and the
Certificate Insurer, and their respective counsel, (j) the fees and
expenses of your counsel up to $25,000 per Certificate Offering, and (k)
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 Certificates 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 Certificate
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.
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(b) Andrews & Kurth, counsel for the Company, shall have
furnished to the Underwriters an opinion, dated the related Closing
Date, to the effect that:
(i) this Agreement and the related Terms Agreement
have been duly executed and delivered by the Company;
(ii) each of the related Pooling and Servicing
Agreement, any FHA Claims Agreement and any related Insurance
Agreement have been duly executed and delivered by the Company and
is a legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms;
(iii) the Offered Certificates, when duly executed
and countersigned by the Trustee in accordance with the related
Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits of such Pooling and
Servicing Agreement;
(iv) the related Pooling and Servicing Agreement is
not required to be qualified under the Trust Indenture Act of
1939, as amended, and the trust created thereunder is not required
to be registered under the 1940 Act;
(v) such counsel confirms that the related
Registration Statement is effective under the Act and, to the best
of such counsel's knowledge, no stop order with respect thereto
has been issued, and no proceeding for that purpose has been
instituted or threatened by the Commission under the Act; such
Registration Statement (except the financial statements and
schedules and other financial and statistical data included
therein and the documents incorporated by reference therein), at
the time it became effective and the related Final Prospectus
(except the financial statements and schedules and the other
financial and statistical data included therein, the documents
incorporated by reference therein and the information included in
the first sentence of the last paragraph on the cover page, the
information under the heading "Underwriting" therein insofar as
such information relates to the offer and sale of the Certificates
by the Underwriters, as of the date of the Prospectus Supplement,
conformed in all material respects to the requirements of the Act
and the rules and regulations thereunder; and no information has
come to the attention of such counsel that causes it to believe
that (A) such Registration Statement (except the financial
statements and schedules and the other
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financial and statistical data included therein and the documents
incorporated by reference therein) at the time it became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (B) such
Final Prospectus or any amendment or supplement thereto (except
the financial statements and schedules and the other financial and
statistical data included therein, the documents incorporated by
reference therein and the information included in the first
sentence of the last paragraph on the cover page, the information
under the heading "Underwriting" therein insofar as such
information relates to the offer and sale of the Certificates by
the Underwriters), as of the date of the Prospectus Supplement or
at the related Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(vi) the statements set forth under the heading
"Description of the Certificates" in the related Final Prospectus,
insofar as such statements purport to summarize certain provisions
of the related Pooling and Servicing Agreement and the related
Offered Certificates, provide a fair summary of such provisions;
(vii) the statements set forth in the related Final
Prospectus under the headings "Certain Legal Aspects of the
Mortgage Assets", "Certain Federal Income Tax Consequences"
(insofar as they relate specifically to the purchase, ownership and
disposition of the related Offered Certificates) and "ERISA
Considerations" (insofar as they relate specifically to the
purchase, ownership and disposition of such Offered Certificates),
to the extent that they constitute matters of law or legal
conclusions, provide a fair summary of such law or conclusions;
(viii) such HUD/FHA regulatory matters as reasonably
required by the Underwriters; and
(ix) assuming compliance with all provisions of the
related Pooling and Servicing Agreement, for federal income tax
purposes, (A) if any election is made to treat the assets of the
Trust Fund (other than assets excluded from a REMIC, as described
in the Final Prospectus) as one or more REMICs: the related Trust
Fund (other than any such excluded
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assets) will qualify as one or more REMICs pursuant to Section 860D
of the Internal Revenue Code of 1986, as amended (the "Code"), each
Class of Certificates of the related Series, other than the related
Residual Class or Classes, will constitute a class of "regular
interests" in a related REMIC within the meaning of the Code, and
each Class of such Certificates specified in the related Final
Prospectus as a Class of Residual Certificates will constitute the
"residual interest" in a related REMIC within the meaning of the
Code; (B) if no such REMIC election is made: the Trust Fund will be
treated as a "grantor trust".
Such opinion may express its reliance as to factual matters on the
representations and warranties made by, and on certificates or other
documents furnished by, officers of the parties to this Agreement, the
related Terms Agreement, the related Pooling and Servicing Agreement or
any related Insurance Agreement. Such opinion may assume the due
authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than the Company. Such
opinion may be qualified, insofar as it concerns the enforceability of
the documents referred to therein, to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights in
general and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law). Such
opinion may be further qualified as expressing no opinion as to (x) the
statements in the related Final Prospectus under the heading "Certain
Legal Aspects of the Mortgage Assets" except insofar as such statements
relate to the laws of the State of Texas and the laws of the United
States, and (y) the statements in such Final Prospectus under the
headings "ERISA Considerations" and "Certain Federal Income Tax
Consequences" except insofar as such statements relate to the laws of
the United States.
(c) Ronald M. Mankoff, as General Counsel for the Company and
FFI, shall have furnished to the Underwriters an opinion, dated the
related Closing Date, 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 this Agreement, the related Terms Agreement, the
related Pooling and Servicing Agreement, the related Insurance
Agreement and the Certificates of the related Series;
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<PAGE>
(ii) The Company has full power and authority to deposit
the related Mortgage Loans as contemplated herein and in the
related Pooling and Servicing Agreement and FFI has full power and
authority to transfer and service the related Mortgage Loans as
contemplated in the related loan sale agreement and the related
Pooling and Servicing Agreement;
(iii) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by (a) the Company of the transactions contemplated
herein and in the related Pooling and Servicing Agreement (b) by
FFI of the transactions contemplated in the related loan sale
agreement and the Pooling 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 Certificates of the
related Series nor delivery of the related Offered Certificates,
nor the consummation of any other of the transactions contemplated
in this Agreement, the related Terms Agreement, the related Pooling
and Servicing Agreement or the related Insurance Agreement, nor the
fulfillment of the terms of the related Certificates, the related
Pooling and Servicing Agreement, this Agreement, the related Terms
Agreement or the related Insurance Agreement 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 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
agreement or instrument known to such counsel 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 Pooling and Servicing Agreement, the related
Insurance Agreement or the related Certificates, (ii) seeking to
prevent the issuance of the Certificates of the related Series or
the consummation by the Company or FFI, as applicable, of
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any of the transactions contemplated by this Agreement, such Terms
Agreement, such Pooling and Servicing Agreement or such Insurance
Agreement, 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 Pooling and Servicing
Agreement, such Insurance Agreement or the related Certificates.
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, FFI or public officials.
(d) The Underwriters shall have received from Brown & Wood,
counsel for the Underwriters, such opinion or opinions, dated the
related Closing Date, with respect to the issuance and sale of the
Certificates of the related Series, the related Registration Statement,
the related Final Prospectus and such other related matters in form and
substance that is customary and reasonably acceptable to the
Underwriters, and the Company shall have furnished to such counsel such
documents as the Underwriters may reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Company shall have furnished to the Underwriters a
certificate of the Company, signed by the President or any Vice
President dated the related Closing Date, to the effect that the signers
of such certificate have carefully examined the related Registration
Statement (excluding any Current Reports and any other documents
incorporated by reference therein), the related Final Prospectus, the
Form 8-K relating to the Subsequent Mortgage Loans, this Agreement and
the related Terms Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and
as of the related Closing Date with the same effect as if made on
such Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
(ii) no stop order suspending the effectiveness of such
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to their knowledge, threatened; and
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(iii) nothing has come to their attention that would
lead them to believe that such Registration Statement (excluding
any Current Report) contains any untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
that the related Final Prospectus (excluding the related Current
Report) contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or that the Form 8-K
relating to the Subsequent Mortgage Loans includes any untrue
statement of a material fact or omits to state any information
which the Final Prospectus states will be included in such Form 8-K.
(f) Counsel for the 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 to certain matters relating to the Trustee.
In addition, such counsel shall furnish to the Underwriters such
opinions as to the treatment of the Trust Fund for purposes of state tax
law where the Trustee maintains possession of the assets of the Trust
Fund as are customary and reasonably satisfactory to the Underwriters.
(g) 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
Certificates and certain matters relating to the Company and the
Servicer.
(h) The Policy relating to the Offered Certificates 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.
(i) If applicable, counsel for the Certificate Insurer shall
have furnished to the Underwriters an opinion, dated the related Closing
Date, in form and substance that is customary and reasonably acceptable
to the Underwriters regarding to certain matters relating to the
Certificate Insurer.
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<PAGE>
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 Certificate Insurer or public officials.
(j) The Trustee shall have received from the Depositor all
funds required to be delivered by the Depositor to be deposited in any
account required to be established in accordance with the related
Pooling and Servicing Agreement.
(k) If applicable, the Servicer, as FHA Claims Administrator,
and the Depositor, as FHA Insurance Holder, shall have executed and
delivered the FHA Claims Agreement in form and substance reasonably
acceptable to the Underwriters.
(l) The Offered Certificates of the related Series shall have
received the ratings specified in the related Terms Agreement (the
"Required Ratings").
(m) On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (i) any intended or
possible downgrading or (ii) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
and originally requested by the Company relating to any previously
issued asset-backed securities of the Company by any "nationally
recognized statistical rating organization" (as such terms is defined
for purposes of the Exchange Act).
(n) On or prior to the Closing Date, there has been no
downgrading, not has any notice been given of (i) any intended or
possible downgrading or (ii) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
the Certificate Insurer's claims paying ability by any "nationally
recognized statistical rating organization" (as such terms is defined
for purposes of the Exchange Act).
(o) Subsequent to the date of the related Terms Agreement,
there shall not have been any change, or any development involving a
prospective change, in or affecting the business or properties of (i)
the Company, its parent company or any of its subsidiaries, (ii) the
Transferor or (iii) the Certificate Insurer which the Underwriters
conclude in their reasonable judgment, after consultation with the
Company, materially impairs the investment quality of the Offered
Certificates of the related Series so as to make it impractical or
inadvisable to proceed with the public offering or the delivery of such
Offered Certificates as contemplated by the related Final Prospectus.
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<PAGE>
(p) Prior to the related Closing Date, the Company shall have
furnished to the Underwriters such further information, certificates and
documents as the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects with respect to the particular Offered
Certificates 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 Certificates) and the related Terms Agreement and all
obligations of the Underwriters hereunder (with respect to the related
Offered Certificates) and thereunder may be canceled at, or at any time prior
to, the related Closing Date by the Underwriters. Notice of such cancellation
shall be given to the Company in writing, or by telephone or telegraph
confirmed in writing.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and FFI jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person who controls any Underwriter within the meaning of the Act or the
Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Act, the Exchange Act, or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement relating to the Offered Certificates of the
applicable Series as it became effective or in any amendment or supplement
thereof, or in such Registration Statement, in the related Preliminary
Prospectus or the related Final Prospectus, or in any amendment thereof, or
in the Form 8-K referred to in such Final Prospectus or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company and FFI will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein (A) in reliance upon and in
conformity with written information furnished to the Company as herein stated
by or on behalf of any Underwriter through you specifically for use in
connection with the preparation thereof or (B) in any
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<PAGE>
Computational Materials or ABS Term Sheets furnished to prospective investors
by the Underwriters or any Current Report or any amendment or supplement
thereof, except to the extent that any untrue statement or alleged untrue
statement therein or omission therefrom results directly from an error (a
"Mortgage Pool Error") in the information concerning the characteristics of
the Mortgage Loans furnished by the Company to any Underwriter in writing or
by electronic transmission that was used in the preparation of either (x) any
Computational Materials or ABS Term Sheets (or amendments or supplements
thereof) included in such Current Report (or amendment or supplement thereof)
or (y) any written or electronic materials furnished to prospective investors
on which the Computational Materials (or amendments or supplements) were
based.
(b) Each Underwriter agrees, severally, and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement relating to the Offered
Certificates of the applicable Series, and each person who controls the
Company within the meaning of the Act or the Exchange Act to the same extent
as the foregoing indemnities from the Company to each Underwriter, but only
with reference to (A) written information furnished to the Company by or on
behalf of such Underwriter through you specifically for use in the
preparation of the documents referred to in the foregoing indemnity with
respect to the related Series, or (B) any Computational Materials or ABS Term
Sheets (or amendments or supplements thereof) delivered to prospective
investors by such Underwriter, including any Computational Materials or ABS
Term Sheets that are furnished to the Company by such Underwriter pursuant to
Section 8 and incorporated by reference in such Registration Statement, the
related Preliminary Prospectus or the related Final Prospectus or any
amendment or supplement thereof (except that no such indemnity shall be
available for any losses, claims, damages or liabilities, or actions in
respect thereof, resulting from any Mortgage Pool Error, other than a
Corrected Mortgage Pool Error).
(c) Promptly after receipt by an indemnified party under Section 7
of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party under
this Section 7, notify such indemnifying party in writing of the commencement
thereof; but the omission so to notify such indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 7. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party or
parties of the commencement thereof, the indemnifying party or parties will
be entitled to participate therein, and to the extent that they may elect by
written notice delivered to an indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to
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<PAGE>
assume the defense thereof, with counsel satisfactory to such indemnified
party; PROVIDED, HOWEVER, that if the defendants in any such action include
both an indemnified party and an indemnifying party and such indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to an indemnifying party, such indemnified
party or parties shall have the right to select separate counsel to assert
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from an indemnifying party or parties to such indemnified party of their
election so to assume the defense of such action and approval by such
indemnified party of counsel, such indemnifying party or parties will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) such indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party or parties shall not be
liable for the expenses of more than one separate counsel approved by the
indemnified party or parties in the case of subparagraph (a) or (b),
representing the indemnified parties under subparagraph (a) or (b), who are
parties to such action), (ii) the indemnifying party or parties shall not
have employed counsel satisfactory to the indemnified party or parties to
represent such indemnified party or parties within a reasonable time after
notice of commencement of the action or (iii) the indemnifying party or
parties have authorized the employment of counsel for an indemnified party at
the expense of the indemnifying parties; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) If the indemnification provided for in paragraph (a) or (b) of
this Section 7 is due in accordance with its terms but is for any reason held
by a court to be unavailable from the Company, FFI or any Underwriter, on
grounds of policy or otherwise, or if an indemnified party failed to give
notice under paragraph (c) of this Section 7 in respect of a claim otherwise
subject to indemnification in accordance with paragraph (a) or (b) of this
Section 7, the Company, FFI and each Underwriter shall contribute to the
aggregate losses, claims, damages and liabilities (including legal and other
expenses reasonably incurred in connection with investigating or defending
same) to which the Company, FFI and such Underwriter may be subject in such
proportion so that such Underwriter is responsible for that portion
represented by the difference between the portion of the proceeds to the
Company in respect of the Offered Certificates underwritten by such
Underwriter for the related Series and the portion of the total proceeds
received by such Underwriter from
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the sale of such Offered Certificates (the "Underwriting Discount"), and the
Company and FFI are responsible for the balance; PROVIDED, HOWEVER, that in
no case shall any such Underwriter be responsible under this subparagraph for
any amount in excess of such Underwriting Discount applicable to the Offered
Certificates purchased by such Underwriter pursuant to this Agreement and the
related Terms Agreement. Notwithstanding anything to the contrary in this
Section 7(d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 7, each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company,
subject in each case to the immediately preceding sentence of this paragraph
(d).
8. COMPUTATIONAL MATERIALS AND STRUCTURAL TERM SHEETS. (a) In
accordance with Section 10, the Underwriters shall deliver to the Company one
complete copy of all materials provided by the Underwriters to prospective
investors in such Offered Certificates 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 Kidder,
Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated, and
Kidder 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 "Kidder Letters") and the filing
of such material is a condition of the relief granted in such letter (such
materials being the "Computational Materials"), and (ii) "Structural Term
Sheets" within the meaning of the no-action letter dated February 17, 1995
issued by the Division of Corporation Finance of the Commission to the Public
Securities Association (the "PSA Letter") and the filing of such material is
a condition of the relief granted in such letter (such materials being the
"Structural Term Sheets"). Each delivery of Computational Materials and
Structural Term Sheets to the Company pursuant to this paragraph (a) shall be
effected in accordance with Section 10.
(b) Each Underwriter represents and warrants to and agrees with the
Company, as of the date of the related Terms Agreement and as of the Closing
Date, that:
(i) the Computational Materials furnished to the Company
by such Underwriter pursuant to Section 8(a) constitute (either in
original, aggregated or
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consolidated form) all of the materials furnished to prospective
investors by such Underwriter prior to the time of delivery thereof
to the Company that are required to be filed with the Commission with
respect to the related Offered Certificates in accordance with the
Kidder Letters, and such Computational Materials comply with the
requirements of the Kidder Letters;
(ii) the Structural Term Sheets furnished to the Company
by such Underwriter pursuant to Section 8(a) constitute all of the
materials furnished to prospective investors by such Underwriter
prior to the time of delivery thereof to the Company that are
required to be filed with the Commission as "Structural Term
Sheets" with respect to the related Offered Certificates in
accordance with the PSA Letter, and such Structural Term Sheets
comply with the requirements of the PSA Letter; and
(iii) on the date any such Computational Materials or
Structural Term Sheets with respect to such Offered Certificates
(or any written or electronic materials furnished to prospective
investors on which the Computational Materials are based) were last
furnished to each prospective investor by such Underwriter and on
the date of delivery thereof to the Company pursuant to Section
8(a) and on the related Closing Date, such Computational Materials
(or such other materials) or Structural Term Sheets did not and
will not include any untrue statement of a material fact or, when
read in conjunction with the Final Prospectus and Prospectus
Supplement, omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Notwithstanding the foregoing, each Underwriter makes no representation or
warranty as to whether any Computational Materials or Structural Term Sheets
(or any written or electronic materials on which the Computational Materials
are based) included or will include any untrue statement resulting directly
from any Mortgage Pool Error.
(c) If, at any time when a prospectus relating to the Offered
Certificates of a Series is required to be delivered under the Act, it shall
be necessary to amend or supplement the related Final Prospectus as a result
of an untrue statement of a material fact contained in any Computational
Materials or Structural Term Sheets provided by any Underwriter pursuant to
this Section 8 or the omission to state therein a material fact required,
when considered in conjunction with the related Final Prospectus and
Prospectus Supplement, to be stated therein or necessary to make the
statements therein, when read in
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conjunction with the related Final Prospectus and Prospectus Supplement, not
misleading, or if it shall be necessary to amend or supplement any Current
Report relating to any Computational Materials or Structural Term Sheets to
comply with the Act or the rules thereunder, such Underwriter promptly will
prepare and furnish to the Company for filing with the Commission an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Each Underwriter represents and
warrants to the Company, as of the date of delivery by it of such amendment
or supplement to the Company, that such amendment or supplement will not
include any untrue statement of a material fact or, when read in conjunction
with the related Final Prospectus and Prospectus Supplement, omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, each such Underwriter
makes no representation or warranty as to whether any such amendment or
supplement will include any untrue statement resulting directly from any
Mortgage Pool Error.
9. COLLATERAL TERM SHEETS. (a) Prior to the delivery of any
"Collateral Term Sheet" within the meaning of the PSA Letter, the filing of
which material is a condition of the relief granted in such letter (such
material being the "Collateral Term Sheets"), to a prospective investor in
the Offered Certificates, 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 Certificates, the
Underwriters shall deliver to the Company one complete copy of all materials
provided by the Underwriters to prospective investors in such Offered
Certificates which constitute "Collateral Term Sheets." Each delivery of a
Collateral Term Sheet to the Company pursuant to this paragraph (a) shall be
effected in accordance with Section 10. (Collateral Term Sheets and
Structural Term Sheets are, together, referred to herein as "ABS Term
Sheets.") At the time of each such delivery, the Underwriter making such
delivery shall indicate in writing that the materials being delivered
constitute Collateral Term Sheets, and, if there has been any prior such
delivery with respect to the related Series, shall indicate whether such
materials differ in any material respect from any Collateral Term Sheets
previously delivered to the Company with respect to such Series pursuant to
this Section 9(a) as a result of the occurrence of a material change in the
characteristics of the related Mortgage Loans.
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(b) Each Underwriter represents and warrants to and agrees with the
Company as of the date of the related Terms Agreement and as of the Closing
Date, that:
(i) The Collateral Term Sheets furnished to the Company by
such Underwriter pursuant to Section 9(a) constitute all of the materials
furnished to prospective investors by such Underwriter prior to time of
delivery thereof to the Company that are required to be filed with the
Commission as "Collateral Term Sheets" with respect to the related Offered
Certificates in accordance with the PSA Letter, and such Collateral Term
Sheets comply with the requirements of the PSA Letter; and
(ii) On the date any such Collateral Term Sheets with
respect to such Offered Certificates were last furnished to each
prospective investor by such Underwriter and on the date of delivery
thereof to the Company pursuant to Section 9(a) and on the related Closing
Date, such Collateral Term Sheets did not and will not include any untrue
statement of a material fact or, when read in conjunction with the Final
Prospectus and Prospectus Supplement, omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
Notwithstanding the foregoing, each Underwriter makes no representation or
warranty as to whether any Collateral Term Sheet included or will include any
untrue statement or material omission resulting directly from any Mortgage Pool
Error.
(c) If, at any time when a prospectus relating to the Offered
Certificates of a Series is required to be delivered under the Act, it shall be
necessary to amend or supplement the related Final Prospectus as a result of an
untrue statement of a material fact contained in any Collateral Term Sheets
provided by any Underwriter pursuant to this Section 9 or the omission to state
therein a material fact required, when considered in conjunction with the
related Final Prospectus and Prospectus Supplement, to be stated therein or
necessary to make the statements therein, when read in conjunction with the
related Final Prospectus and Prospectus Supplement, not misleading, or if it
shall be necessary to amend or supplement any Current Report relating to any
Collateral Term Sheets to comply with the Act or the rules thereunder, such
Underwriter promptly will prepare and furnish to the Company for filing with the
Commission an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Each Underwriter
represents and warrants to the Company, as of the date of delivery of such
amendment or supplement to the Company, that such amendment or supplement will
not include any untrue statement of a material fact or, when read in conjunction
with
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<PAGE>
the related Final Prospectus and Prospectus Supplement, omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, each such Underwriter makes no
representation or warranty as to whether any such amendment or supplement will
include any untrue statement resulting directly from any Mortgage Pool Error.
10. DELIVERY AND FILING OF CURRENT REPORTS, COLLATERAL TERM SHEETS,
STRUCTURAL TERM SHEETS.
(a) Any Current Report, Collateral Term Sheet or Structural Term
Sheet that is required to be delivered by the Underwriter to the Company
hereunder shall be effected by the delivery of four copies to counsel for
the Company and one copy in computer readable format to the Financial
Printer on or prior to 10:30 a.m. on the date so specified herein.
(b) The Company shall cause the Financial Printer to file with the
Commission any such Current Report, Collateral Term Sheet or Structural
Term Sheet within one business day immediately following the delivery
thereof pursuant to the preceding subsection. The Company shall use its
best efforts to cause any such Current Report, Collateral Term Sheet or
Structural Term Sheet to be so filed prior to 2:00 p.m., New York time, on
such business day and will promptly advise the Underwriters of such filing.
11. TERMINATION. This Agreement (with respect to a particular
Certificate Offering) and the related Terms Agreement shall be subject to
termination in the absolute discretion of the Underwriters, by notice given to
the Company prior to delivery of and payment for the related Offered
Certificates, if prior to the related Closing Date (i) trading in securities
generally on the New York Stock Exchange shall have been suspended or materially
limited, (ii) a general moratorium on commercial banking activities in New York
shall have been declared by either federal or New York State authorities, or
(iii) there shall have occurred any outbreak or material escalation of
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the reasonable judgment
of the Underwriters, impracticable to market such Offered Certificates.
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement and the related Terms Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Underwriters
or the Company or any of the officers, directors of controlling persons referred
to in Section 7 hereof,
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<PAGE>
and will survive delivery of and payment for the related Offered Certificates.
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
Certificates which it or they are obligated to purchase hereunder and under the
applicable Terms Agreement (the "Defaulted Certificates"), 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 Certificates in such amounts as may be agreed
upon and upon the terms herein set forth and under the applicable Terms
Agreement. If, however, you have not completed such arrangements within such
24-hour period, then:
(a) if the aggregate original Certificate Principal Balance of
Defaulted Certificates does not exceed 10% of the aggregate original
Certificate Principal Balance of the Offered Certificates to be purchased
pursuant to such Terms Agreement, the non-defaulting Underwriters named in
such Terms Agreement shall be obligated to purchase the full amount thereof
in the proportions that their respective underwriting obligations
thereunder bear to the underwriting obligations of all non-defaulting
Underwriters; and
(b) if the aggregate original Certificate Principal Balance of
Defaulted Certificates exceeds 10% of the aggregate original Certificate
Principal Balance of the Offered Certificates 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. RAC Financial Group, Inc., the parent of the Company
and FFI, ("RAC") shall guarantee any obligation or liability of the Company or
FFI pursuant to Section 7 hereof. RAC's acceptance of its guarantee obligation
is acknowledged by
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<PAGE>
the execution of the signature page of this Agreement by an authorized
signatory of RAC.
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 Certificate 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.
16. NOTICES. All communications by one party hereunder to all other
parties hereunder will be in writing and effective only on receipt by such other
parties, and will be delivered as follows: (A) to the Underwriters at the
addresses first above written; (B) to the Company at 3773 Howard Hughes Parkway,
Suite 300N, Las Vegas, Nevada 89109, Attention: Michael Orendorf; and (C) to
FFI at FIRSTPLUS FINANCIAL, INC., 1250 Mockingbird Lane, Dallas, Texas 75247-
4902, Attention: Mr. Chris Gramlich.
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Underwriters.
Very truly yours,
FIRSTPLUS INVESTMENT CORPORATION
By: /s/ Christopher J. Gramlich
-----------------------------------
Christopher J. Gramlich
Senior Vice President
FIRSTPLUS FINANCIAL INC.
By: /s/ Christopher J. Gramlich
-----------------------------------
Christopher J. Gramlich
Senior Vice President
ACKNOWLEDGED BY:
RAC FINANCIAL GROUP, INC.
By: Christopher J. Gramlich
-----------------------------------
Christopher J. Gramlich
Senior Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
BANC ONE CAPITAL CORPORATION
By: /s/ Daniel J. Jessee
-------------------------------
Daniel J. Jessee
Vice Chairman
BEAR, STEARNS & CO. INC.
By: /s/ Matthew Perkins
-------------------------------
Matthew Perkins
Associate Director
<PAGE>
EXHIBIT A
FIRSTPLUS HOME LOAN TRUST ___ - __
ASSET-BACKED CERTIFICATES
TERMS AGREEMENT
(to Underwriting Agreement,
dated June 14, 1996
among the Company, FFI and the Underwriters)
FIRSTPLUS INVESTMENT CORPORATION June 14, 1996
1250 Mockingbird Lane
Dallas, Texas 75247-4902
FIRSTPLUS FINANCIAL INC.
1250 Mockingbird Lane
Dallas, Texas 75247-4902
Each of Bear, Stearns & Co. Inc. ("Bear, Stearns") and Banc One
Capital Corporation ("Banc One Capital," each an "Underwriter" and
collectively the "Underwriters") agrees, severally and not jointly, subject
to the terms and provisions herein and of the captioned Underwriting
Agreement (the "Underwriting Agreement"), to purchase such Classes of Series
___-__ Certificates specified opposite its name in Section 2(a) hereof (the
"Offered Certificates"). This letter supplements and modifies the
Underwriting Agreement solely as it relates to the purchase and sale of the
Offered Certificates described below. The Series ___-__ Certificates are
registered with the Securities and Exchange Commission by means of an
effective Registration Statement (No.___). Capitalized terms used and not
defined herein have the meanings given them in the Underwriting Agreement.
Section 1. THE MORTGAGE POOL: The Series ___-__ Certificates shall
evidence the entire beneficial ownership interest in a mortgage pool (the
"Mortgage Pool") of mortgage loans (the "Mortgage Loans") having the
characteristics described in the Prospectus Supplement dated the date hereof.
Section 2. THE CERTIFICATES: The Offered Certificates shall be
issued as follows:
(a) CLASSES: The Offered Certificates shall be issued with the
following Class designations, interest rates and principal balances,
subject in the aggregate to the variance referred to in the Final
Prospectus:
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<PAGE>
Principal Interest Class Purchase
Class Balance Rate Price Percentage
----- --------- -------- ----------------
Each of the Underwriters agrees, severally and not jointly, subject to
the terms and provisions herein and of the captioned Underwriting Agreement,
to purchase the principal balances of the Classes of Series ____ - ____
Certificates specified opposite its name below.
CLASS BEAR, STEARNS BANC ONE CAPITAL
----- --------------- ------------------
(b) The Offered Certificates shall have such other characteristics
as described in the related Final Prospectus.
Section 3. PURCHASE PRICE: The Purchase Price for each Class of
the Offered Certificates shall be the Class Purchase Price Percentage
therefor (as set forth in Section 2(a) above) of the initial Class
Certificates Principal Balance thereof plus accrued interest at the
applicable interest rate per annum of each such Class from and including the
Cut-off Date up to, but not including, ________________ (the "Closing Date").
Section 4. REQUIRED RATINGS: The Offered Certificates shall have
received Required Ratings of at least [ ] from [ ].
Section 5. CERTIFICATE INSURER:
Section 6. LOCATION OF CLOSING:
Section 7. TAX TREATMENT: [One or more elections will be made to
treat the assets of the Trust Fund as a REMIC.]
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Underwriters and the Company.
Very truly yours,
[UNDERWRITER]
as Representative of the several
Underwriters
By:
------------------------------------
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
FIRSTPLUS INVESTMENT CORPORATION
By:
---------------------------------
Name:
Title:
FIRSTPLUS FINANCIAL INC.
By:
---------------------------------
Name:
Title:
ACKNOWLEDGED BY:
RAC FINANCIAL GROUP, INC.
By:
---------------------------------
Name:
Title:
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<PAGE>
EXHIBIT 8.1
[LETTERHEAD]
JUNE 21, 1996
FIRSTPLUS INVESTMENT CORPORATION
3773 Howard Hughes Parkway, Suite 300N
Las Vegas, Nevada 89109
Re: FIRSTPLUS INVESTMENT CORPORATION
FIRSTPLUS Asset-Backed Certificate, Series 1996-2
Ladies and Gentlemen:
We have acted as counsel for FIRSTPLUS INVESTMENT CORPORATION, a
corporation organized under the laws of the State of Nevada (the "COMPANY"), in
connection with the issuance of the FIRSTPLUS Asset-Backed Certificates, Series
1996-2, consisting of the following Classes of Certificates (collectively, the
"CERTIFICATES"): (i) Class A-1 Certificates, Class A-2 Certificates, Class A-3
Certificates, Class A-4 Certificates, Class A-5 Certificates, Class A-6
Certificates, Class A-7 Certificates, and Class A-8 Certificates (collectively,
the "OFFERED CERTIFICATES"), (ii) Class B Certificates, and (iii) Class R
Certificates. The Certificates are being issued pursuant to a Pooling and
Servicing Agreement dated as of June 1, 1996 between the Company, as Depositor,
FIRSTPLUS FINANCIAL, INC., as Transferor and Servicer, and First Trust of
California, National Association, as Trustee. The Offered Certificates have
been offered and sold pursuant to the Company's Prospectus dated June 14, 1996
and the related Prospectus Supplement dated June 14, 1996 (collectively, the
"PROSPECTUS"), which were previously filed with the Securities and Exchange
Commission pursuant to Rule 424(b)(5), and the Company's Registration Statement
on Form S-3 (the "REGISTRATION STATEMENT"), which was declared effective by the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
on May 23, 1996.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of the Company's organizational documents, the Pooling
and Servicing Agreement and the form of Certificates included therein and such
other documents, records, certificates of the Company and public officials and
other instruments as we have deemed necessary for the purposes of rendering this
opinion. In addition, we have assumed that the Pooling and Servicing Agreement
was duly executed and delivered; that the Certificates were duly executed
and delivered substantially in the forms contemplated by the Pooling and
Servicing Agreement; and that the Certificates were sold as described in the
Prospectus and the Registration Statement. Capitalized terms used and not
otherwise defined herein have the meanings assigned to them in the Pooling and
Servicing Agreement.
<PAGE>
FIRSTPLUS INVESTMENT CORPORATION
June 21, 1996
Page -2-
On the basis of the foregoing, we are of the opinion that:
(a) The description of federal income tax consequences appearing
under the heading "Certain Federal Income Tax Consequences" in the
Prospectus accurately describes the material federal income tax
consequences to holders of the Offfered Certificates under existing law and
subject to the qualifications and assumptions stated therein.
(b) Assuming (a) an election will be properly made to treat the
segregated pool of assets (the "REMIC POOL") consisting of the Trust Fund
(exclusive of the Pre-Funding Account and the Capitalized Interest Account)
as a "real estate mortgage investment conduit" ("REMIC") for Federal
income tax purposes, (b) compliance with all provisions of the Pooling and
Servicing Agreement, and (c) continuing compliance with the applicable
provisions of the Code as it may be amended from time to time and any
applicable Treasury regulations adopted thereunder, the REMIC Pool will
qualify as a REMIC for Federal income tax purposes, each of the
Certificates, other than the Class R Certificates, created pursuant to the
Pooling and Servicing Agreement will be treated as a "regular interest" in
a REMIC within the meaning of Section 860G(a)(1) of the Code and the Class
R Certificates will be treated as a "residual interest" in a REMIC within
the meaning of Section 860G(a)(2) of the Code.
The opinion herein is based upon our interpretations of current law,
including court authority and existing Final and Temporary Regulations, which
are subject to change both prospectively and retroactively, and upon the facts
and assumptions discussed herein. This opinion letter is limited to the matters
set forth herein, and no opinions are intended to be implied or may be inferred
beyond those expressly stated herein. Our opinion is rendered as of the date
hereof and we assume no obligation to update or supplement this opinion or any
matter related to this opinion to reflect any change of fact, circumstances, or
law after the date hereof. In addition, our opinion is based on the assumption
that the matter will be properly presented to the applicable court.
Furthermore, our opinion is not binding on the IRS or a court. In addition, we
must note that our opinion represents merely our best legal judgment on the
matters presented and that others may disagree with our conclusion. There can
be no assurance that the IRS will not take a contrary position or that a court
would agree with our opinion if litigated.
We hereby consent to the reference to us under the caption "Certain Federal
Income Tax Consequences" in the Prospectus, and to the filing of this opinion as
Exhibit 8.1 to a Form 8-K Current Report to the Registration Statement, without
implying or admitting that we are experts within the meaning of the Securities
Act of 1933, as amended, with respect to any part of the Prospectus or the
Registration Statement.
Sincerely,
/s/ ANDREWS & KURTH L.L.P.
2445;1568
