FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
FUNB SERIES 0000-X0
XXXXXXXXXXXX XXXXXXXXX
Xxxxxxxxx, Xxxxx Xxxxxxxx
December 14, 1999
FIRST UNION SECURITIES, INC.,
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
First Union Commercial Mortgage Securities, Inc., a North Carolina
corporation (the "Company"), has issued its Commercial Mortgage Pass-Through
Certificates, FUNB Series 1999-C4 (the "Certificates"), in 18 classes (each, a
"Class") as designated in the Prospectus Supplement (as defined below). The
Company further proposes to sell to you (each an "Underwriter" and together, the
"Underwriters") the Certificates set forth in Schedule I hereto (the
"Underwritten Certificates") in the respective original principal
and notional amounts set forth in Schedule I. The Certificates represent in the
aggregate the entire beneficial ownership interest in a trust fund (the "Trust
Fund") consisting of a segregated pool (the "Mortgage Pool") of mortgage loans
(the "Mortgage Loans") secured by first liens on the borrowers' fee or leasehold
interests in multifamily and commercial properties (the "Mortgaged Properties").
The Certificates will be issued on December 17, 1999 (the "Closing Date")
pursuant to a pooling and servicing agreement (the "Pooling and Servicing
Agreement"), dated as of December 1, 1999, among the Company, First Union
National Bank, as master servicer ("FUNB" or the "Master Servicer"), ORIX Real
Estate Mortgage Capital. LLC., as special servicer (the "Special Servicer") and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee"). The
Mortgage Loans will be acquired by the Company from First Union National Bank
and Xxxxxxx Xxxxx Mortgage Capital Inc. (each, a "Mortgage Loan Seller" and
together, the "Mortgage Loan Sellers") on the Closing Date pursuant to two
separate mortgage loan purchase agreements (the "Mortgage Loan Purchase
Agreements"), each dated as of December 1, 1999, between the applicable Mortgage
Loan Seller and the Company. The Underwritten Certificates and the Mortgage Pool
are described more fully in Schedule I hereto and in a registration statement
furnished to you by the Company.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
1. REPRESENTATIONS AND WARRANTIES. (i) The Company represents and warrants
to, and agrees with, each Underwriter that:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (No. 333-62671) on Form S-3 for the
registration of Commercial Mortgage Pass-Through Certificates, issuable in
series, including the Underwritten Certificates, under the Securities Act of
1933, as amended (the "1933 Act"), which registration statement has become
effective and a copy of which, as amended to the date hereof, has heretofore
been delivered to you. The Company meets the requirements for use of Form S-3
under the 1933 Act, and such registration statement, as amended at the date
hereof, meets the requirements set forth in Rule 415(a)(1)(x) under the 1933 Act
and complies in all other material respects with the 1933 Act and the rules and
regulations thereunder. The Company proposes to file with the Commission, with
your consent, pursuant to Rule 424 under the 1933 Act, a supplement dated
December 14, 1999 (the "Prospectus Supplement") to the prospectus dated December
8, 1999 (the "Basic Prospectus"), relating to the Underwritten Certificates and
the method of distribution thereof, and has previously
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advised you of all further information (financial and other) with respect to the
Underwritten Certificates and the Mortgage Pool to be set forth therein. Such
registration statement (No. 333-62671), including all exhibits thereto, is
referred to herein as the "Registration Statement"; and the Basic Prospectus and
the Prospectus Supplement, together with any amendment thereof or supplement
thereto authorized by the Company prior to the Closing Date for use in
connection with the offering of the Underwritten Certificates, are hereinafter
called the "Prospectus". Any preliminary form of the Prospectus Supplement that
has heretofore been filed pursuant to Rule 424 or, prior to the effective date
of the Registration Statement, pursuant to Rule 402(a) or 424(a), is hereinafter
called a "Preliminary Prospectus Supplement". If so stated in the Prospectus
Supplement, the Company will file with the Commission within fifteen days of the
issuance of the Underwritten Certificates a report on Form 8-K ("8-K") setting
forth specific information concerning the Mortgage Pool and the Underwritten
Certificates to the extent that such information is not set forth in the
Prospectus Supplement.
(b) As of the date hereof, as of the date on which the Prospectus
Supplement is first filed pursuant to Rule 424 under the 1933 Act, as of the
date on which, prior to the Closing Date, any amendment to the Registration
Statement becomes effective, as of the date on which any supplement to the
Prospectus Supplement is filed with the Commission, and as of the Closing Date,
(i) the Registration Statement, as amended as of any such time, and the
Prospectus, as amended or supplemented as of any such time, complies and will
comply in all material respects with the applicable requirements of the 1933 Act
and the rules and regulations thereunder, (ii) the Registration Statement, as
amended as of any such time, does not contain and will not contain any untrue
statement of a material fact and does not omit and will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, and (iii) the Prospectus, as amended or
supplemented as of any such time, does not contain and will not contain any
untrue statement of a material fact and does not omit and will not omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
statements contained in or omitted from the Registration Statement or the
Prospectus or any amendment or supplement thereto made in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through you specifically for use in the Registration
Statement and the Prospectus (such information being identified in Section
8(b)).
(c) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of North
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Carolina with corporate power and authority to own, lease or operate its
properties and to conduct its business as now conducted by it and to enter into
and perform its obligations under this Agreement and the Pooling and Servicing
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business.
(d) As of the date hereof, as of the date on which the Prospectus
Supplement is first filed pursuant to Rule 424 under the 1933 Act, as of the
date on which, prior to the Closing Date, any amendment to the Registration
Statement becomes effective, as of the date on which any supplement to the
Prospectus Supplement is filed with the Commission, and as of the Closing Date,
there has not and will not have been (i) any request by the Commission for any
further amendment to the Registration Statement or the Prospectus or for any
additional information, (ii) any issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threat of any proceeding for that purpose or (iii) any notification with respect
to the suspension of the qualification of the Underwritten Certificates for sale
in any jurisdiction or any initiation or threat of any proceeding for such
purpose.
(e) Each of this Agreement, the Pooling and Servicing Agreement and each
Mortgage Loan Purchase Agreement has been duly authorized, executed and
delivered by the Company and each of this Agreement, the Pooling and Servicing
Agreement and each Mortgage Loan Purchase Agreement constitutes legal, valid and
binding agreements of the Company, enforceable against the Company in accordance
with their respective terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws affecting the enforcement of the rights of creditors generally,
(ii) general principles of equity, whether enforcement is sought in a proceeding
in equity or at law, and (iii) public policy considerations underlying the
securities laws, to the extent that such public policy considerations limit the
enforceability of the provisions of this Agreement or the Pooling and Servicing
Agreement that purport to provide indemnification from securities law
liabilities.
(f) As of the Closing Date, the Underwritten Certificates, the Pooling and
Servicing Agreement and the Mortgage Loan Purchase Agreements will conform in
all material respects to the respective descriptions thereof contained in the
Prospectus. As of the Closing Date, the Underwritten Certificates will be duly
and validly authorized and, when delivered in accordance with the Pooling and
Servicing Agreement to you against payment therefor as provided herein, will be
duly and validly issued
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and outstanding and entitled to the benefits of the Pooling and Servicing
Agreement.
(g) [Reserved]
(h) The Company is not in violation of its certificate of incorporation or
by-laws or in default under any agreement, indenture or instrument the effect of
which violation or default would be material to the Company or which violation
or default would have a material adverse affect on the performance of its
obligations under this Agreement, the Pooling and Servicing Agreement or the
Mortgage Loan Purchase Agreements. Neither the issuance and sale of the
Underwritten Certificates, nor the execution and delivery by the Company of this
Agreement or the Pooling and Servicing Agreement nor the consummation by the
Company of any of the transactions herein or therein contemplated, nor
compliance by the Company with the provisions hereof or thereof, did, does or
will conflict with or result in a breach of any term or provision of the
certificate of incorporation or by-laws of the Company or conflict with, result
in a breach, violation or acceleration of, or constitute a default under, the
terms of any indenture or other agreement or instrument to which the Company is
a party or by which it or any material asset is bound, 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.
(i) There is no action, suit or proceeding against the Company pending,
or, to the knowledge of the Company, threatened, before any court, arbitrator,
administrative agency or other tribunal (i) asserting the invalidity of this
Agreement, the Pooling and Servicing Agreement, the Mortgage Loan Purchase
Agreements or the Underwritten Certificates, (ii) seeking to prevent the
issuance of the Underwritten Certificates or the consummation of any of the
transactions contemplated by this Agreement (iii) that might materially and
adversely affect the performance by the Company of its obligations under, or the
validity or enforceability of, this Agreement, the Pooling and Servicing
Agreement, the Mortgage Loan Purchase Agreements or the Underwritten
Certificates or (iv) seeking to affect adversely the federal income tax
attributes of the Underwritten Certificates as described in the Prospectus.
(j) There are no contracts, indentures or other documents of a character
required by the 1933 Act or by the rules and regulations thereunder to be
described or referred to in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which have not been so
described or referred to therein or so filed or incorporated by reference as
exhibits thereto.
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(k) No authorization, approval or consent of any court or governmental
authority or agency is necessary in connection with the offering or sale of the
Underwritten Certificates pursuant to this Agreement, except such as have been,
or as of the Closing Date will have been, obtained or such as may otherwise be
required under applicable state securities laws in connection with the purchase
and offer and sale of the Underwritten Certificates by the Underwriters and any
recordation of the respective assignments of the Mortgage Loans to the Trustee
pursuant to the Pooling and Servicing Agreement that have not been completed.
(l) The Company possesses all material licenses, certificates, authorities
or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it, and the
Company has not received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which, singly
or in the aggregate, if the subject of any unfavorable decision, ruling or
finding, would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company.
(m) Any taxes, fees and other governmental charges in connection with the
execution and delivery of this Agreement and the delivery and sale of the
Underwritten Certificates (other than such federal, state and local taxes as may
be payable on the income or gain recognized therefrom) have been or will be paid
at or prior to the Closing Date.
(n) Neither the Company nor the Trust Fund is, and neither the sale of the
Underwritten Certificates in the manner contemplated by the Prospectus nor the
activities of the Trust Fund pursuant to the Pooling and Servicing Agreement
will cause the Company or the Trust Fund to be, an "investment company" or under
the control of an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(o) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Company reported the transfer of the Mortgage
Loans to the Trustee in exchange for the Underwritten Certificates and will
report the sale of the Underwritten Certificates to the Underwriters pursuant to
this Agreement as a sale of the interests in the Mortgage Loans evidenced by the
Underwritten Certificates. The consideration received by the Company upon the
sale of the Underwritten Certificates to the Underwriters will constitute
reasonably equivalent value and fair consideration for the Underwritten
Certificates. The Company will be solvent at all relevant times prior to, and
will not be rendered insolvent by,
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the sale of the Underwritten Certificates to the Underwriters. In addition, the
Company was solvent at all relevant times prior to, and was not rendered
insolvent by, the transfer of the Mortgage Loans to the Trustee on behalf of the
Trust Fund. The Company is not selling the Underwritten Certificates to the
Underwriters and did not transfer the Mortgage Loans to the Trustee on behalf of
the Trust Fund with any intent to hinder, delay or defraud any of the creditors
of the Company.
(p) At the Closing Date, the respective classes of Underwritten
Certificates shall continue to have maintained ratings no lower than those set
forth in Schedule I hereto by the nationally recognized statistical rating
organizations identified in Schedule I hereto (individually and collectively,
the "Rating Agency").
(ii) FUNB represents and warrants to, and agrees with, each Underwriter,
that:
(a) FUNB is a national banking association validly existing under the laws
of the United States of America and possesses all requisite authority, power,
licenses, permits and franchises to carry on its business as currently conducted
by it and to execute, deliver and comply with its obligations under the terms of
this Agreement.
(b) This Agreement has been duly and validly authorized, executed and
delivered by FUNB and, assuming due authorization, execution and delivery hereof
by the Company and the Underwriters, constitutes a legal, valid and binding
obligation of FUNB, enforceable against FUNB in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights in general, as they may be applied in the
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context of the insolvency of a national banking association, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law), and by public policy considerations underlying
the securities laws, to the extent that such public policy considerations limit
the enforceability of the provisions of this Agreement which purport to provide
indemnification from liabilities under applicable securities laws.
(c) The execution and delivery of this Agreement by FUNB and FUNB's
performance and compliance with the terms of this Agreement will not (A) violate
FUNB's articles of association or By-Laws, (B) violate any law or regulation or
any administrative decree or order to which it is subject or (C) constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any contract, agreement
or other instrument to which FUNB is a party or by which FUNB is bound.
(d) FUNB is not in default with respect to any order or decree of any
court or any order, regulation or demand of any federal, state, municipal or
other governmental agency or body, which default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of FUNB or its properties or have consequences that would materially
and adversely affect its performance hereunder.
(e) FUNB is not a party to or bound by any agreement or instrument or
subject to any articles of association, bylaws or any other corporate
restriction or any judgment, order, writ, injunction, decree, law or regulation
that would materially and adversely affect the ability of FUNB to perform its
obligations under this Agreement or that requires the consent of any third
person to the execution of this Agreement or the performance by FUNB of its
obligations under this Agreement (except to the extent such consent has been
obtained).
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by FUNB of or compliance by FUNB with this Agreement or the
consummation of the transactions contemplated by this Agreement except as have
previously been obtained.
(g) No litigation is pending or, to the best of FUNB's knowledge,
threatened against FUNB that would prohibit its entering into this Agreement or
materially and adversely affect the performance by FUNB of its obligations under
this Agreement.
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(h) Each representation and warranty of the Company set forth in Section
1(I) hereof is true and correct as of the date hereof or as of the date
specified in such representation and warranty.
(III) Each Underwriter represents and warrants to the Company that, as of
the date hereof and as of the Closing Date, (i) such Underwriter has complied in
all material respects with all of its obligations under Section 4 hereof and
(ii) with respect to all Computational Materials and ABS Term Sheets, if any,
provided by such Underwriter to the Company pursuant to Section 4(b)(iv), such
Computational Materials and ABS Term Sheets are accurate in all material
respects (taking into account the assumptions explicitly set forth or otherwise
referred to in the Computational Materials or in the Prospectus Supplement or
the Preliminary Prospectus Supplement or ABS Term Sheets, and provided that the
underlying data regarding the Mortgage Loans, and the related Mortgagors and
Mortgaged Properties, provided to the Underwriters by the Mortgage Loan Sellers
is accurate and complete in all material respects) and constitute a complete set
of all Computational Materials and ABS Term Sheets that are required to be filed
with the Commission pursuant to the No-Action Letters (as defined herein).
2. PURCHASE AND SALE. Subject to the terms and conditions and in reliance
upon the representations and warranties set forth herein, the Company agrees to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Company, at the applicable purchase prices set forth in
Schedule I hereto, the respective principal and notional amounts of the
Underwritten Certificates set forth opposite the name of each Underwriter set
forth in Schedule II hereto, and any additional portions of the Underwritten
Certificates that any such Underwriter may be obligated to purchase pursuant to
Section 10, in all cases plus accrued interest as set forth in Schedule I.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Certificates shall be made in the manner, at the location(s), on the Closing
Date at the time specified in Schedule I hereto (or such later date not later
than ten business days after such specified date as you shall designate), which
date and time may be changed by agreement between you and the Company or as
provided in Section 10 hereof. Delivery of the Underwritten Certificates shall
be made either directly to you or through the facilities of The Depository Trust
Company ("DTC"), as specified in Schedule I hereto, for the respective accounts
of the Underwriters against payment by
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the respective Underwriters through you of the purchase price therefor in
immediately available funds wired to such bank as may be designated by the
Company, or such other manner of payment as may be agreed upon by the Company
and you. Any Class of Underwritten Certificates to be delivered through the
facilities of DTC shall be represented by one or more global Certificates
registered in the name of Cede & Co., as nominee of DTC, which global
Certificate(s) shall be placed in the custody of DTC not later than 10:00 a.m.
(New York City time) on the Closing Date pursuant to a custodial arrangement to
be entered into between the Trustee or its agent and DTC. Unless delivered
through the facilities of DTC, the Underwritten Certificates shall be in fully
registered certificated form, in such denominations and registered in such names
as you may have requested in writing not less than one full business day in
advance of the Closing Date.
The Company agrees to have the Underwritten Certificates, including the
global Certificates representing the Underwritten Certificates to be delivered
through the facilities of DTC, available for inspection, checking and, if
applicable, packaging by you in New York, New York, not later than the close of
business (New York City time) on the business day preceding the Closing Date.
References herein, including, without limitation, in the Schedules hereto,
to actions taken or to be taken following the Closing Date with respect to any
Underwritten Certificates that are to be delivered through the facilities of DTC
shall include, if the context so permits, actions taken or to be taken with
respect to the interests in such Certificates as reflected on the books and
records of DTC.
4. OFFERING BY UNDERWRITERS.
(a) It is understood that the Underwriters propose to offer the
Underwritten Certificates for sale to the public, including, without limitation,
in and from the State of New York, as set forth in the Prospectus Supplement. It
is further understood that the Company, in reliance upon an exemption from the
Attorney General of the State of New York to be granted pursuant to Policy
Statement 104 and 105, has not and will not file the offering pursuant to
Section 352-e of the General Business Law of the State of New York with respect
to the Underwritten Certificates which are not "mortgage related securities" as
defined in the 1934 Act (as defined below).
(b) Each Underwriter may prepare and provide to prospective investors
certain Computational Materials, Structural Term Sheets or Collateral Term
Sheets in connection with its offering of the Certificates, subject to the
following conditions:
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(i) Such Underwriter shall comply with the requirements of the
no-action letter, dated May 20, 1994, issued by the Commission to Xxxxxx,
Peabody Acceptance Corporation I, Xxxxxx, Xxxxxxx & Co. Incorporated and
Xxxxxx Structured Asset Corporation, as made applicable to other issuers
and underwriters by the Commission in response to the request of the
Public Securities Association, dated May 25, 1994 (collectively, the
"Xxxxxx/PSA Letter"), and the requirements of the no-action letter, dated
February 17, 1995, issued by the Commission to the Public Securities
Association (the "PSA Letter" and, together with the Xxxxxx/PSA Letter,
the "No-Action Letters").
(ii) For purposes hereof, "Computational Materials" shall have the
meaning given such term in the No-Action Letters, but shall include only
those Computational Materials that have been prepared or delivered to
prospective investors by or at the direction of such Underwriter. For
purposes hereof, "ABS Term Sheets," "Structural Term Sheets" and
"Collateral Term Sheets" shall have the meanings given such terms in the
PSA Letter but shall include only those ABS Term Sheets, Structural Term
Sheets or Collateral Term Sheets that have been prepared for or delivered
to prospective investors by or at the direction of such Underwriter.
(iii) All Computational Materials and ABS Term Sheets provided to
prospective investors shall bear a legend in a form previously approved by
the Company or its counsel.
(iv) Such Underwriter shall not distribute any such Computational
Materials or ABS Term Sheets unless the forms and methodology thereof are
in accordance with this Agreement. Such Underwriter shall provide to the
Company, for filing on Form 8-K as provided in Section 5(g), copies (in
such format as required by the Company) of all Computational Materials and
ABS Term Sheets. The Underwriter may provide copies of the foregoing in a
consolidated or aggregated form including all information required to be
filed. All Computational Materials and ABS Term Sheets described in this
subsection (iv) must be provided to the Company (a) in paper or electronic
format suitable for filing with the Commission and (b) not later than
10:00 a.m. (New York City time) on a business day that is not less than
one business day before filing thereof is required pursuant to the terms
of the No-Action Letters.
(v) All information included in the Computational Materials and ABS
Term Sheets shall be generated based on substantially the same methodology
and assumptions as are used to generate the
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11
information in the Prospectus Supplement as set forth therein; provided
that the Computational Materials and ABS Term Sheets may include
information based on alternative methodologies or assumptions if specified
therein. If any Computational Materials or ABS Term Sheets were based on
assumptions with respect to the Mortgage Pool that differ from the final
Pool Information in any material respect or on Underwritten Certificate
structuring assumptions (except in the case of Computational Materials
when the different structuring terms were hypothesized and so described)
that were revised in any material respect prior to the printing of the
Prospectus, then to the extent that it has not already done so, such
Underwriter shall immediately inform the Company and, upon the direction
of the Company, and if not corrected by the Prospectus, shall prepare
revised Computational Materials and ABS Term Sheets, as the case may be,
based on the final Pool Information and structuring assumptions, circulate
such revised Computational Materials and ABS Term Sheets to all recipients
of the preliminary versions thereof, and include such revised
Computational Materials and ABS Term Sheets (marked, "as revised") in the
materials delivered to the Company pursuant to subsection (iv) above.
(vi) If, within the period during which the Prospectus relating to
the Underwritten Certificates is required to be delivered under the 1933
Act, any Computational Materials or ABS Term Sheets are determined, in the
reasonable judgment of the Company or such Underwriter, to contain a
material error or, when read together with the Prospectus, a material
omission, then (unless the material error or omission was corrected in the
Prospectus) the Underwriter shall prepare a corrected version of such
Computational Materials or ABS Term Sheets, shall circulate such corrected
Computational Materials or ABS Term Sheets to all recipients of the prior
versions thereof, and shall deliver copies of such corrected Computational
Materials or ABS Term Sheets (marked, "as corrected") to the Company for
filing with the Commission in a subsequent Form 8-K submission (subject to
the Company's obtaining an accountant's comfort letter in respect of such
corrected Computational Materials and ABS Term Sheets, which shall be at
the expense of such Underwriter).
(vii) Such Underwriter shall be deemed to have represented, as of
the Closing Date, that except for Computational Materials and/or ABS Term
Sheets provided to the Company pursuant to subsection (iv) above, such
Underwriter did not provide any prospective investors with any information
in written or electronic form in connection with the offering of the
Underwritten Certificates that is required to be filed with the Commission
in accordance with the No-Action Letters.
(viii) In the event of any delay in the delivery by such Underwriter
to the Company of all Computational Materials and ABS Term Sheets required
to be delivered in accordance with subsection (iv) above, the Company
shall have the right to delay the release of the Prospectus to investors
or to the Underwriter, to delay the Closing Date and to take other
appropriate actions in each case as necessary in order to allow the
Company to comply with its agreement set forth in Section 5(g) to file the
Computational Materials and ABS Term Sheets by the time specified therein.
(ix) Computational Materials and ABS Term Sheets may be distributed
by the Underwriter through electronic means in accordance with SEC Release
No. 33-7233 or other applicable laws or regulations.
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(c) Each Underwriter further agrees that it shall promptly provide the
Company with such information as to matters of fact as the Company may
reasonably request to enable it to comply with its reporting requirements with
respect to each class of Underwritten Certificates to the extent such
information can in the good faith judgment of the Underwriter be determined by
it.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
Underwriters that:
(a) The Company will not file any amendment to the Registration Statement
or any supplement to the Basic Prospectus relating to or affecting the
Underwritten Certificates, unless the Company has furnished a copy to you for
your review prior to filing, and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing sentence,
the Company will cause the Prospectus Supplement to be transmitted to the
Commission for filing pursuant to Rule 424 under the 1933 Act or will cause the
Prospectus Supplement to be filed with the Commission pursuant to said Rule 424.
The Company promptly will advise you or counsel for the Underwriters (i) when
the Prospectus Supplement shall have been filed or transmitted to the Commission
for filing pursuant to Rule 424, (ii) when any amendment to the Registration
Statement shall have become effective, (iii) of any request by the Commission to
amend the Registration Statement or supplement the Prospectus Supplement or for
any additional information in respect of the offering contemplated hereby, (iv)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto which
shall have become effective on or prior to the Closing Date or the institution
or threatening of any proceeding for that purpose, and (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Underwritten Certificates for sale in any jurisdiction or the institution
or threatening of any proceeding for that purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or suspension and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Underwritten
Certificates is required to be delivered under the 1933 Act, any event occurs as
a result of which the 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 the light of the circumstances
under which they were made, not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the 1933 Act or the rules and
regulations thereunder, the Company promptly will
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prepare and file with the Commission, at the expense of the Company, subject to
paragraph (a) of this Section 5, an amendment or supplement that will correct
such statement or omission or an amendment that will effect such compliance and,
if such amendment or supplement is required to be contained in a post-effective
amendment to the Registration Statement, the Company will use its best efforts
to cause such amendment to the Registration Statement to be made effective as
soon as possible.
(c) The Company will furnish to you and to counsel for the Underwriters,
without charge, signed copies of the Registration Statement (including exhibits
thereto) and each amendment thereto which shall become effective on or prior to
the Closing Date, and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and each such amendment and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the 1933
Act, as many copies of any Preliminary Prospectus Supplement, the Prospectus
Supplement and the Basic Prospectus and any amendments and supplements thereto
as you may reasonably request.
(d) The Company will furnish such information, execute such instruments
and take such action, if any, as may be required to qualify the Underwritten
Certificates for sale under the laws of such jurisdictions as you may designate
and will maintain such qualifications in effect so long as required for the
distribution of the Underwritten Certificates; provided, however, that the
Company shall not be required to qualify to do business in any jurisdiction
where it is not now qualified or to take any action that would subject it to
general or unlimited service of process in any jurisdiction where it is not now
subject to such service of process.
(e) The Company will pay, or cause to be paid, all costs and expenses in
connection with the transactions herein contemplated, including, but not limited
to, the fees and disbursements of its counsel; the costs and expenses of
printing (or otherwise reproducing) and delivering the Pooling and Servicing
Agreement and the Underwritten Certificates; the fees and disbursements of
accountants for the Company; the reasonable out-of-pocket costs and expenses in
connection with the qualification or exemption of the Underwritten Certificates
under state securities or "blue sky" laws, including filing fees and reasonable
fees and disbursements of counsel in connection therewith, in connection with
the preparation of any blue sky survey and in connection with any determination
of the eligibility of the Underwritten Certificates for investment by
institutional investors and the preparation of any legal investment survey; the
expenses of printing any such blue sky survey and legal investment survey; the
cost and expenses in connection with the preparation, printing and filing of the
Registration Statement (including
[Underwriting Agreement]
14
exhibits thereto), the Basic Prospectus, the Preliminary Prospectus Supplement,
if any, and the Prospectus Supplement, the preparation and printing of this
Agreement and the delivery to the Underwriters of such copies of the Basic
Prospectus and each Preliminary Prospectus Supplement, if any, and Prospectus
Supplement as you may reasonably request; the fees of the Rating Agencies that
are rating the Underwritten Certificates; and the reasonable fees and
disbursements of counsel to the Underwriters. Except as provided above or in
Section 7, the Underwriters shall be responsible for paying all other costs and
expenses incurred by them in connection with the purchase and sale of the
Underwritten Certificates.
(f) The Company will enforce the rights of the Underwriters as third party
beneficiaries under the Pooling and Servicing Agreement as set forth in Section
11.09 thereof and will not consent to any amendment of the Pooling and Servicing
Agreement that would adversely affect such rights of the Underwriters.
(g) The Company shall, as to itself, and the Company, or pursuant to the
Pooling and Servicing Agreement the Trustee, will be required to, as to the
Trust Fund, satisfy and comply with all reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the rules and regulations
thereunder. The Company will also file with the Commission a report on Form 8-K
setting forth all Computational Materials and ABS Term Sheets provided to the
Company by an Underwriter and identified by it as such within the time period
allotted for such filing pursuant to the No-Action Letters; provided, however,
that prior to such filing of the Computational Materials and ABS Term Sheets by
the Company, each Underwriter must comply with its obligations pursuant to
Section 4(b). The Company shall file any corrected Computational Materials
described in Section 4(b)(vi) as soon as practicable following receipt thereof.
[Underwriting Agreement]
15
(i) The Company shall take all reasonable action necessary to enable the
Rating Agencies to provide their respective credit ratings of the Certificates
as described in the Prospectus.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligation of
each Underwriter hereunder to purchase its allocated share of the Underwritten
Certificates shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the date hereof, as
of the date of the effectiveness of any amendment to the Registration Statement
filed prior to the Closing Date, as of the date the Prospectus Supplement or any
supplement thereto is filed with the Commission and as of the Closing Date, to
the accuracy of the statements of the Company made in any certificates delivered
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and not withdrawn and no proceedings
for that purpose shall have been instituted or, to the Company's knowledge,
threatened; and the Prospectus Supplement shall have been filed or transmitted
for filing with the Commission in accordance with Rule 424 under the 1933 Act;
(b) You shall have received from Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the
Underwriters, a favorable opinion, dated the Closing Date, as to such matters
regarding the Underwritten Certificates as you may reasonably request;
(c) The Company shall have delivered to you a certificate of the Company,
signed by an authorized officer of the Company and dated the Closing Date, to
the effect that: (i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects at and as of the Closing
Date with the same effect as if made on the Closing Date; and (ii) the Company
has in all material respects complied with all the agreements and satisfied all
the conditions on its part that are required hereby to be performed or satisfied
at or prior to the Closing Date; and FUNB shall have delivered to you a
certificate of FUNB, signed by an authorized officer of FUNB and dated the
Closing Date, of the President, a Senior Vice President or a Vice President of
FUNB to the effect that: (i) the representations and warranties of FUNB in this
Agreement are true and correct in all material respects; and (ii) FUNB has, in
all material respects,
[Underwriting Agreement]
16
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date;
(d) You shall have received with respect to each of the Company and FUNB a
good standing certificate from the Secretary of State of the State of North
Carolina, dated not earlier than 30 days prior to the Closing Date;
(e) (i) You shall have received from the Secretary or an assistant
secretary of the Company, in his individual capacity, a certificate, dated the
Closing Date, to the effect that: (x) each individual who, as an officer or
representative of the Company, signed this Agreement, or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated herein, was at the respective times of such signing
and delivery, and is as of the Closing Date, duly elected or appointed,
qualified and acting as such officer or representative, and the signatures of
such persons appearing on such documents and certificates are their genuine
signatures; and (y) no event (including, without limitation, any act or omission
on the part of the Company) has occurred since the date of the good standing
certificate referred to in paragraph 6(d) above which has affected the good
standing of the Company under the laws of the State of North Carolina. Such
certificate shall be accompanied by true and complete copies (certified as such
by the Secretary or an assistant secretary of the Company) of the certificate of
incorporation and by-laws of the Company, as in effect on the Closing Date, and
of the resolutions of the Company and any required shareholder consent relating
to the transactions contemplated in this Agreement; and (ii) you shall have
received from the Secretary or an assistant secretary of the FUNB, in his
individual capacity, a certificate, dated the Closing Date, to the effect that:
(x) each individual who, as an officer or representative of FUNB, signed this
Agreement or any other document or certificate delivered on or before the
Closing Date in connection with the transactions contemplated herein, was at the
respective times of such signing and delivery, and is as of the Closing Date,
duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such documents
and certificates are their genuine signatures; and (y) no event (including,
without limitation, any act or omission on the part of FUNB) has occurred since
the date of the good standing certificate referred to in paragraph 6(d) above
which has affected the good standing of FUNB under the laws of the United States
of America. Such certificate shall be accompanied by true and complete copies
(certified as such by the Secretary or an assistant secretary of FUNB) of the
articles of association or by-laws of FUNB, as in effect on the Closing Date,
and of the resolutions of FUNB and any required shareholder consent relating to
the transactions contemplated in this Agreement;
[Underwriting Agreement]
17
(f) You shall have received from Xxxxx, Xxxxx & Xxxxx, special counsel for
the Company, a favorable opinion, dated the Closing Date and satisfactory in
form and substance to you and counsel for the Underwriters, to the effect that:
(i) The Registration Statement and any amendments thereto have
become effective under the 1933 Act; to the best knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement, as amended, has been issued and not withdrawn, no proceedings
for that purpose have been instituted or threatened and not terminated;
and the Registration Statement, the Basic Prospectus, the Prospectus
Supplement and each amendment or supplement thereto, as of their
respective effective or issue dates (other than the financial statements,
schedules and other financial and statistical information contained
therein as to which such counsel need express no opinion), complied as to
form in all material respects with the applicable requirements of the 1933
Act and the rules and regulations thereunder; and such counsel has no
reason to believe that (A) the Registration Statement (which, for purposes
of this clause, shall be deemed not to include any exhibits filed
therewith), or any amendment thereto, at the time it became effective,
contained or, as of the date of such opinion, contains any untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, or that (B) the Prospectus, as amended or
supplemented, as of the respective date thereof and at the date hereof,
contained or contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading
(other than the financial statements, schedules and other financial and
statistical information contained therein as to which such counsel need
express no opinion);
(ii) To the best knowledge of such counsel, there are no material
contracts, indentures or other documents of a character required to be
described or referred to in the Registration Statement, as amended, or the
Prospectus or to be filed as exhibits to the Registration Statement, as
amended, other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto;
(iii) To the best knowledge of such counsel, there are no actions,
proceedings or investigations pending before or threatened by any court,
administrative agency or other tribunal to which the
[Underwriting Agreement]
18
Company is a party or of which any of its properties is the subject (a)
which if determined adversely to the Company would have a material adverse
effect on the business or financial condition of the Company, (b)
asserting the invalidity of this Agreement or the Underwritten
Certificates, (c) seeking to prevent the sale of the Underwritten
Certificates or the consummation by the Company of any of the transactions
contemplated by this Agreement, as the case may be, or (d) which might
materially and adversely affect the performance by the Company of its
obligations under, or the validity or enforceability of, this Agreement or
the Underwritten Certificates;
(iv) This Agreement has been duly authorized, executed and delivered
by the Company, and constitutes a valid, legal, binding and enforceable
agreement of the Company, subject, as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, to general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law and
public policy considerations underlying the securities laws, to the extent
that such public policy considerations limit the enforceability of the
provisions of this Agreement that purports to provide indemnification from
securities law liabilities;
(v) [Reserved]
(vi) The statements set forth in the Prospectus Supplement under the
headings "Description of the Certificates" and "Servicing of the Mortgage
Loans" and in the Basic Prospectus under the headings "Description of the
Certificates" and "Description of the Pooling Agreements", insofar as such
statements purport to summarize certain provisions of the Underwritten
Certificates and the Pooling and Servicing Agreement, are true and correct
in all material respects;
(vii) The statements set forth in the Basic Prospectus and the
Prospectus Supplement under the headings "Material Federal Income Tax
Consequences", "ERISA Considerations" and "Legal Investment", to the
extent that they constitute matters of federal law or legal conclusions
with respect thereto, are correct in all material respects with respect to
those consequences or aspects that are discussed;
(viii) Any Class of Underwritten Certificates will be "mortgage
related securities", as defined in Section 3(a)(41) of the 1934 Act, so
long as such Certificates are rated "AAA" or "AA" (or its equivalent) by
at least one nationally recognized statistical rating organization;
(ix) [Reserved]
[Underwriting Agreement]
19
(x) No consent, approval, authorization or order of any State of New
York or federal court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated herein,
except (A) such as have been obtained under the 1933 Act; (B) such as may
be required under the blue sky laws of any jurisdiction in connection with
the offer and sale of the Underwritten Certificates by the Underwriters,
as to which such counsel need express no opinion; and (C) any recordation
of the assignments of the Mortgage Loans pursuant to the Pooling and
Servicing Agreement that has not yet been completed.
(xi) Assuming compliance with all provisions of the Pooling and
Servicing Agreement, for federal income tax purposes, REMIC I, REMIC II
and REMIC III will each qualify as a real estate mortgage investment
conduit (a "REMIC") under the Internal Revenue Code of 1986 (the "Code"),
the Class R-I Certificates will be the sole class of "residual interests"
in REMIC I, the Class R-II Certificates will be the sole class of
"residual interests" in REMIC II and the Class R-III Certificates will be
the sole class of "residual interests" in REMIC III and the Class A-1,
Class A-2, Class IO, Class B, Class C, Class D, Class E, Class, Class F,
Class G, Class H, Class J, Class K, Class L, Class M and Class N
Certificates will be the "regular interests" in REMIC III; and
(xii) The Certificates conform in all material respects to the
description thereof contained in the Prospectus; and the Pooling and
Servicing Agreement conforms in all material respects to the description
thereof contained in the Prospectus.
With respect to such opinion, such counsel 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 and the Pooling and Servicing Agreement; may assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company; may qualify such
opinion only as to the federal laws of the United States of America, the laws of
the State of New York, the laws of the State of North Carolina and the
corporation law of the State of Delaware; and may, to the extent deemed
necessary by such counsel, rely on the opinion of counsel in the regular employ
of the Company or any affiliate of the Company or independent North Carolina
counsel. Such counsel shall also confirm that the Underwriters may rely, on and
as of the Closing Date, on any opinion or opinions of such counsel submitted to
any Rating Agency as if addressed to the Underwriters and dated the Closing
Date;
[Underwriting Agreement]
20
(g) You shall have received from Xxxxxxx X. Xxxxxxx, counsel for the
Company and FUNB, a favorable opinion, dated the Closing Date and satisfactory
in form and substance to you and counsel for the Underwriters, to the effect
that:
(i) The Company is a corporation in good standing under the laws of
the State of North Carolina and has the corporate power and authority to
enter into and perform its obligations under this Agreement.
(ii) No consent, approval, authorization or order of the State of
North Carolina is required for the consummation by the Company of the
transactions contemplated herein.
(iii) Neither the sale of the Underwritten Certificates, nor the
execution or delivery of or performance under this Agreement, nor the
consummation of any other of the transactions contemplated herein will
conflict with or result in a breach or violation of any term or provision
of, or constitute a default (or an event which with the passing of time or
notification, or both, would constitute a default) under, the certificate
of incorporation or by-laws of the Company, or, to the knowledge of such
counsel, any indenture or other agreement or instrument to which the
Company is a party or by which it is bound, or any State of North Carolina
or federal statute or regulation applicable to the Company, or, to the
knowledge of such counsel, any order of any State of North Carolina or
federal court, regulatory body, administrative agency or governmental body
having jurisdiction over the Company.
(iv) FUNB is a national banking association validly existing under
the laws of the United States of America and possesses all requisite power
and authority to enter into and perform its obligations under this
Agreement.
(v) This Agreement has been duly authorized, executed and delivered
by FUNB.
(vi) This Agreement, upon due authorization, execution and delivery
by the other parties hereto, will constitute a valid, legal and binding
agreement of FUNB, enforceable against FUNB in accordance with its terms,
except as enforceability may be limited by (a) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar
laws affecting the enforcement of the rights of creditors generally, as
they may be applied in the context of the insolvency of a national banking
association, (b) general principles
[Underwriting Agreement]
21
of equity, regardless of whether enforcement is sought in a proceeding in
equity or at law, and (c) public policy considerations underlying the
securities laws, to the extent that such public policy considerations
limit the enforceability of provisions which purport to provide
indemnification from securities law liabilities.
(vii) No consent, approval, authorization or order of any federal
court or governmental agency or body is required for the consummation by
FUNB of the transactions contemplated by this Agreement, except such as
may be required under the "Blue Sky" laws of any jurisdiction in
connection with the purchase and the offer and sale of the Certificates by
the Underwriters, as to which such counsel express no opinion.
(viii) The fulfillment of the terms of this Agreement will not
conflict with or result in a breach or violation of any term or provision
of, or constitute a default (or an event which with the passing of time or
notification, or both, would constitute a material default) under, the
articles of association or by-laws of FUNB or, to such counsel's
knowledge, any contract, agreement or other instrument to which FUNB is a
party or by which it is bound, or any federal statute or regulation
applicable to FUNB or, to such counsel's knowledge, any order of any
federal court, regulatory body, administrative agency or governmental body
having jurisdiction over FUNB.
(ix) To the best knowledge of such counsel, there are no actions,
proceedings or investigations pending before or threatened by any court,
administrative agency or other tribunal to which FUNB is a party or of
which any of its properties is the subject (a) which, if determined
adversely to FUNB, would have a material adverse effect on the business or
financial condition of FUNB, (b) asserting the invalidity of this
Agreement, (c) seeking to prevent the consummation by FUNB of any of the
transactions contemplated by this Agreement or (d) which might materially
and adversely affect the performance by FUNB of its obligations under, or
the validity or enforceability of this Agreement.
(h) You shall have received from KPMG LLP, certified public accountants, a
letter dated the Closing Date and satisfactory in form and substance to you and
counsel for the Underwriters, to the following effect:
(1) they have performed certain specified procedures as a result
of which they have determined that the information of an
accounting, financial or statistical
[Underwriting Agreement]
22
nature set forth in the Prospectus Supplement under the
captions "Summary of the Prospectus Supplement," "Description
of the Mortgage Pool" and "Yield and Maturity Considerations"
and on Annex A agrees with the data sheet or computer tape
prepared by or on behalf of the Mortgage Loan Sellers, unless
non-material deviations are otherwise noted in such letter;
and
(2) they have compared the data contained in the data sheet or
computer tape referred to in the immediately preceding clause
(1) to information contained in an agreed upon sampling of the
Mortgage Loan files and in such other sources as shall be
specified by them, and found such data and information to be
in agreement in all material respects, unless non-material
deviations are otherwise noted in such letter;
(i) You shall have received written confirmation from the Rating
Agencies that the ratings assigned to the Underwritten Certificates on the
Closing Date are as described on Schedule I hereto and that, as of the
Closing Date, no notice has been given of (i) any intended or possible
downgrading or (ii) any review or possible changes in such ratings;
(j) [Reserved]
(k) You shall have received from the Secretary or an assistant secretary
of the Trustee, in his individual capacity, a certificate, dated the Closing
Date, to the effect that the information under the heading "Description of the
Certificates - The Trustee" in the Prospectus Supplement is true and correct in
all material respects;
(l) You shall have received from Kennedy, Covington, Xxxxxxx & Xxxxxxx,
counsel for the Trustee, written confirmation that the Underwriters may rely on
the opinion of such counsel delivered on the Closing Date pursuant to the
Certificate Purchase Agreement as if such opinion has been addressed to the
Underwriters;
(m) [Reserved]
(n) You shall have received from the Secretary or an assistant secretary
of the Master Servicer, in his individual capacity, a certificate, dated the
Closing Date, to the effect that the information relating to the Master Servicer
under the heading "Servicing of the Mortgage Loans - The
[Underwriting Agreement]
23
Master Servicer and Special Servicer" in the Prospectus Supplement, is true and
correct in all material respects;
(o) You shall have received from Xxxxxxx Xxxxxxxx & Wood, counsel for the
Master Servicer, written confirmation that the Underwriters may rely on the
opinion of such counsel delivered on the Closing Date pursuant to the
Certificate Purchase Agreement, as if such opinion has been addressed to the
Underwriters;
(p) [Reserved]
(q) You shall have received from the Secretary or an assistant secretary
of the Special Servicer, in his individual capacity, a certificate, dated the
Closing Date, to the effect that the information relating to the Special
Servicer under the heading "Servicing of the Mortgage Loans- The Master Servicer
and Special Servicer" in the Prospectus Supplement, is true and correct in all
material respects;
(r) You shall have received from Akin, Gump, Strauss, Xxxxx & Xxxx,
L.L.P., counsel for the Special Servicer, written confirmation that the
Underwriters may rely on the opinion of such counsel delivered on the Closing
Date pursuant to the Certificate Purchase Agreement, as if such opinion has been
addressed to the Underwriters;
(s) [Reserved]
(t) You shall have received from Xxxxxxx X. Xxxxxxx, counsel for FUNB as
Mortgage Loan Seller, written confirmation that the Underwriters may rely on any
opinion or opinions of such counsel delivered on the Closing Date pursuant to
the Mortgage Loan Purchase Agreement or addressed to any Rating Agency, in each
case as if such opinion were addressed to the Underwriters;
(u) You shall have received from Xxxxx, Xxxxx & Xxxxx, special counsel for
the Company, written confirmation that the Underwriters may rely on the opinions
of such counsel with respect to the transfer of the Mortgage Loans to the
Company and all other opinions delivered to the Rating Agencies in connection
with the transactions contemplated hereby, as if such opinions had been
addressed to the Underwriters;
(v) You shall have received from Xxxxx, Xxxxx & Xxxxx, special counsel for
the Company, written confirmation that the Underwriters may rely on the opinions
of such counsel delivered under the Certificate Purchase Agreement, as if such
opinions had been addressed to the Underwriters;
[Underwriting Agreement]
24
(w) You shall have received from Xxxxxxx X. Xxxxxxx, counsel for the
Company and FUNB, written confirmation that the Underwriters may rely on the
opinions of such counsel delivered on the Closing Date pursuant to the
Certificate Purchase Agreement, as if such opinions had been addressed to the
Underwriters; and
(x) All proceedings in connection with the transactions contemplated by
this Agreement and all documents incident hereto shall be satisfactory in form
and substance to you and counsel for the Underwriters, and you and such counsel
shall have received such additional information, certificates and documents as
you or they may have reasonably requested.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, if
the Company is in breach of any covenants or agreements contained herein or if
any of the opinions and certificates referred to above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to you and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by you. Notice of such cancellation shall be given to
the Company in writing, or by telephone or telegraph confirmed in writing.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Underwritten Certificates provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 6 is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof,
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally, upon demand, for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Underwritten Certificates.
8. INDEMNIFICATION.
(a) The Company and FUNB, jointly and severally, agree to indemnify and
hold harmless each Underwriter, its directors and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (1) any untrue statement or
alleged untrue statement of a material fact contained in
[Underwriting Agreement]
25
the Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Basic Prospectus, any Preliminary
Prospectus Supplement or the Prospectus Supplement (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 or
(2) any error in the information supplied to the Underwriters relating to
the Mortgage Loans other than information contained in the Preliminary
Prospectus Supplement or the Prospectus Supplement (the "Collateral
Information"); provided that such Collateral Information is used in a
manner not inconsistent with the 1933 Act; provided, further, that no
indemnity shall be provided if the Collateral Information was corrected
and such corrected materials were supplied to the Underwriters prior to
the dissemination of the materials with respect to which such loss,
liability, claim, damage or expense was incurred; and provided, further,
that the foregoing indemnity with respect to the Basic Prospectus or any
Preliminary Prospectus Supplement shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter)
from whom the person asserting claims giving rise to any such losses,
claims, damages, expenses or liabilities purchased Underwritten
Certificates if such untrue statement or omission or alleged untrue
statement or omission made in any Preliminary Prospectus Supplement is
eliminated or remedied in the Prospectus and, if required by law, a copy
of the Prospectus shall not have been furnished to such person at or prior
to the written confirmation of the sale of such Certificates to such
person; and
(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, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by such Underwriter),
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 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 in reliance
upon and in conformity with written information (as specified in Section 8(b)
below) furnished to the Company by such Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or in the
[Underwriting Agreement]
26
Basic Prospectus, any Preliminary Prospectus Supplement or the Prospectus
Supplement (or any amendment or supplement thereto).
(b) Each Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 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 untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or in the Basic
Prospectus, any Preliminary Prospectus Supplement or the Prospectus
Supplement (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter expressly for use in the Registration Statement (or any
amendment thereto) or in the Basic Prospectus, such Preliminary Prospectus
Supplement or the Prospectus Supplement (or any amendment or supplement
thereto); in addition, each Underwriter, severally but not jointly, shall
indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all losses,
liabilities, claims and damages as incurred arising out of any untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission of a material fact contained in any ABS Term Sheets or
Computational Materials which, when read together with any Preliminary
Prospectus Supplement and the Prospectus Supplement, was required to be
stated therein or necessary to make the statements therein not misleading;
provided, that no such material misstatement or omission arises from an
error or omission in information relating to the underlying data regarding
the Mortgage Loans or the related Mortgagors or Mortgaged Properties
provided by the Company to such Underwriter; and provided, further, that
any such ABS Term Sheets or Computational Materials were prepared by such
Underwriter and distributed by such Underwriter;
[Underwriting Agreement]
27
It is hereby acknowledged that (i) the statements set forth in the second
sentence of the last paragraph on the cover of the Prospectus Supplement, (ii)
the statements in the third paragraph and the first sentence of the fifth
paragraph under the caption "Method of Distribution" in the Prospectus
Supplement and (iii) the statements in any Computational Materials and ABS Term
Sheets delivered by the Underwriters to the Company for filing with the
Commission pursuant to this Agreement and the No-Action Letters, constitute the
only written information furnished to the Company by the Underwriters expressly
for use in the Registration Statement (or any amendment thereto) or in the Basic
Prospectus, the Preliminary Prospectus Supplement or the Prospectus Supplement
(or any amendment or supplement thereto).
(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 and, to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from the
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have agreed to the retention of such
counsel, or (ii) the indemnifying party shall not have assumed the defense of
such action, with counsel satisfactory to the indemnified party, within a
reasonable period following the indemnifying party's receiving notice of such
action, or (iii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. In no event shall
the indemnifying party or parties be liable for fees and expenses of more than
one counsel (or, in the event the Company is the indemnifying party, one counsel
for each Underwriter) (in addition to any local counsel) separate from its or
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. Unless it shall assume the
defense of any proceeding, an indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but, if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party shall indemnify the indemnified party
[Underwriting Agreement]
28
from and against any loss or liability by reason of such settlement or judgment.
If an indemnifying party assumes the defense of any proceeding, it shall be
entitled to settle such proceeding with the consent of the indemnified party or,
if such settlement provides for release of the indemnified party in connection
with all matters relating to the proceeding that have been asserted against the
indemnified party in such proceeding by the other parties to such settlement,
without the consent of the indemnified party.
(d) The indemnity agreements contained in this Section 8 shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by the Company, the Underwriters, any of
their respective directors or officers, or any person controlling the Company or
the Underwriters, and (iii) acceptance of and payment for any of the
Underwritten Certificates.
9. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section 8
hereof is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, or if such indemnification
provided for in Section 8 hereof is insufficient in respect of any losses,
liabilities, claims or damages referred to therein, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and each Underwriter on the other from the offering of
the Underwritten Certificates or (ii) if the allocation provided by clause (i)
above 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 on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of the Underwriters on the other 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 or by the Underwriters, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation; and provided, further, that in no event shall
[Underwriting Agreement]
29
either Underwriter be obligated to contribute more than its share of the
underwriting discounts and commissions pertaining to the Underwritten
Certificates. It is hereby acknowledged that the respective Underwriters'
obligations under this Section 9 shall be several and not joint. For purposes of
this Section, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and such
Underwriter's directors, shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company.
(b) The parties hereto agree that it would not be just and equitable if
contribution were determined by pro rata allocation or by any other method of
allocation that does not take account of the considerations referred to in
subsection (a) above. The amount paid or payable by an indemnified party as a
result of the losses, liabilities, claims or damages referred to in Section 8 or
this Section 9 shall be deemed to include any legal fees and disbursements or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such claim except where the indemnified party is
required to bear such expenses, which expenses the indemnifying party shall pay
as and when incurred, at the request of the indemnified party, to the extent
that it is reasonable to believe that the indemnifying party will be ultimately
obligated to pay such expenses. In the event that any expenses so paid by the
indemnifying party are subsequently determined to not be required to be borne by
the indemnifying party hereunder, the party which received such payment shall
promptly refund the amount so paid to the party which made such payment. The
remedies provided for in Section 8 and this Section 9 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.
(c) The contribution agreements contained in this Section 9 shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by the Company, the Underwriters, any of
their respective directors or officers, or any person controlling the Company or
the Underwriters, and (iii) acceptance of and payment for any of the
Underwritten Certificates.
10. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail
to purchase and pay for any of the Underwritten Certificates agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally (in the respective proportions which the portion of the
[Underwriting Agreement]
30
Underwritten Certificates set forth opposite their names in Schedule II hereto
bears to the aggregate amount of Underwritten Certificates set forth opposite
the names of all the remaining Underwriters) to purchase the Underwritten
Certificates that the defaulting Underwriter or Underwriters agreed but failed
to purchase; provided, however, that in the event that the amount of
Underwritten Certificates that the defaulting Underwriter or Underwriters agreed
but failed to purchase shall exceed 10% of the aggregate principal amount of
Underwritten Certificates set forth in Schedule II hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Underwritten Certificates, and if such
nondefaulting Underwriters do not purchase all of the Underwritten Certificates,
this Agreement will terminate without liability to any nondefaulting Underwriter
or the Company, except as provided in Section 11 or Section 12. In the event of
a default by any Underwriter as set forth in this Section 10, the Closing Date
for the Underwritten Certificates shall be postponed for such period, not
exceeding ten business days, as you shall determine in order that the required
changes in the Registration Statement and the Prospectus Supplement or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, or by or on behalf of the
Company, or by or on behalf of any of the controlling persons and officers and
directors referred to in Sections 8 and 9, and shall survive delivery of the
Underwritten Certificates to the Underwriters.
12. TERMINATION OF AGREEMENT; SURVIVAL.
(a) The Underwriters may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Date (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or of FUNB
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any outbreak of hostilities or escalation thereof or other calamity or
crisis the effect of which is such as to make it, in the reasonable judgment of
either Underwriter, impracticable to
[Underwriting Agreement]
31
market the Underwritten Certificates or to enforce contracts for the sale of the
Underwritten Certificates, or (iii) if trading in any securities of the Company
or of FUNB has been suspended or limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or on the Nasdaq National Market has been suspended or limited,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
as provided in Section 11 or Section 12 (c).
(c) The provisions of Section 5(e) regarding the payment of costs and
expenses and the provisions of Sections 8 and 9 hereof shall survive the
termination of this Agreement.
13. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to Xxx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
Attention: R. Xxxx Xxxxxxxx and to Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Real Estate Investment Banking; notices to FUNB shall be directed to
it at Xxx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention:
Xxxxx Xxxxxxxxx and notices to the Company shall be directed to it at First
Union Commercial Mortgage Securities, Inc., Xxx Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000-0000, Attention: President; or, in either case, such other
address as may hereafter be furnished by the Underwriters, FUNB or the Company
to the other such parties in writing.
14. PARTIES. This Agreement shall inure to the benefit of and be binding
upon each of the Underwriters, the Company and FUNB and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and FUNB and their respective successors and the
controlling persons and officers and directors referred to in Sections 8 and 9
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and
[Underwriting Agreement]
32
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and FUNB and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Underwritten Certificates from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
15. APPLICABLE LAW; COUNTERPARTS. This 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 entirely in said State. This Agreement may
be executed in any number of counterparts, each of which shall for all purposes
be deemed to be an original and all of which shall together constitute but one
and the same instrument.
[Underwriting Agreement]
33
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, FUNB and the several Underwriters.
Very truly yours,
FIRST UNION COMMERCIAL
MORTGAGE SECURITIES, INC.
By:_____________________________
Name:
TITLE:
[Underwriting Agreement]
34
FIRST UNION NATIONAL BANK
FIRST UNION SECURITIES, INC.
BY:_____________________________
NAME:
TITLE:
The foregoing Agreement is hereby confirmed and accepted as of the date
first above written.
FIRST UNION SECURITIES, INC.
BY:_____________________________
NAME:___________________________
TITLE: _________________________
[Underwriting Agreement]
35
XXXXXXX XXXXX, XXXXXX XXXXXX & XXXXX INCORPORATED
By:_____________________________
Name:
Title:
[Underwriting Agreement]
36
SCHEDULE I
Underwriting Agreement dated December 14, 1999:
As used in this Schedule I, the term "Registration Statement" refers to
registration statement No. 333-62671 filed by the Company on Form S-3 and
declared effective on January 8, 1999. The term "Basic Prospectus" refers to the
form of prospectus in the Registration Statement or such later form as most
recently filed by the Company pursuant to Rule 424(b) under the Securities Act
of 1933, as amended. The term "Prospectus Supplement" refers to the supplement
dated December 14, 1999 to the Basic Prospectus, relating to the mortgage
pass-through certificates being sold pursuant to the Underwriting Agreement (the
"Underwritten Certificates").
Mortgage Pool:
One hundred and fifty-six commercial mortgage loans, having an aggregate
principal balance, after giving effect to payments of principal due on or before
December 1, 1999 (the "Cut-Off Date"), of $885,738,326 (the "Cut-Off Date Pool
Balance"), and otherwise complying in all material respects with the description
thereof set forth in the Prospectus Supplement.
Title, Purchase Price and Description of Underwritten Certificates:
First Union Commercial Mortgage Trust, Commercial Mortgage Pass-Through
Certificates FUNB Series 1999-C4, Class A-1 and Class A-2.
Closing Date
Aggregate
Certificate Pass - Through Purchase Price
Designation Principal Balance Rate Rating (1) Percentage (2)
----------- ----------------- ---- ---------- --------------
Class A-1 $206,000,000 7.184% AAA/AAA (2)
Class A-2 $447,232,000 7.390% AAA/AAA (2)
--------------------
(1) By each of Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and Duff & Xxxxxx Credit Rating Co.
(2) There shall be added to the purchase price for each Class of Underwritten
Certificates accrued interest, if any, at the initial Pass-Through Rate
for such Class from December 1, 1999, up to, but not including, the
Closing Date.
Credit Support and Other Terms and Conditions of the Underwritten Certificates:
As described in the Prospectus Supplement.
Closing Date and Location: 10:00 a.m. (New York City time) on December 17, 1999
at the offices of Xxxxx, Xxxxx & Xxxxx, New York, New York; except that delivery
of the Underwritten Certificates shall be made through the facilities of The
Depository Trust Company.
- 2 -
Initial Public Offering Price: The Underwritten Certificates will be offered to
the public in negotiated transactions or otherwise at varying prices to be
determined at the time of sale.
- 3 -
SCHEDULE II
Underwriting Agreement dated December 14, 1999
Approximate Aggregate Principal or Notional Amount of Certificates to
Underwriters Class to be Purchased by First Union Securities, Inc.
Class A-1 $164,526,719
Class A-2 $357,192,299
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx Incorporated
Class A-1 $ 41,473,281
Class A-2 $ 90,039,701
- 4 -
